Possible turnaround for Solara Active Pharma Sciences Limited (NSE:SOLARA) insiders, still down ₹51m after a ₹168m shopping spree

Some of the losses seen by insiders who purchased ₹168m worth of Solara Active Pharma Sciences Limited (NSE:SOLARA) shares over the past year were recovered after the stock increased by 21% over the past week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled ₹51m since the time of purchase.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Solara Active Pharma Sciences

The Last 12 Months Of Insider Transactions At Solara Active Pharma Sciences

The insider, Deepak Vaidya, made the biggest insider sale in the last 12 months. That single transaction was for ₹52m worth of shares at a price of ₹1,734 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (₹808). So it is hard to draw any strong conclusion from it.

Over the last year, we can see that insiders have bought 145.03k shares worth ₹168m. But they sold 56.50k shares for ₹93m. In total, Solara Active Pharma Sciences insiders bought more than they sold over the last year. Their average price was about ₹1,157. I'd consider this a positive as it suggests insiders see value at around the current price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Solara Active Pharma Sciences is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Solara Active Pharma Sciences Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Solara Active Pharma Sciences. Founder & Non-Executive Director Arun Pillai spent ₹44m on stock, and there wasn't any selling. This could be interpreted as suggesting a positive outlook.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Solara Active Pharma Sciences insiders own 19% of the company, worth about ₹5.4b. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Solara Active Pharma Sciences Tell Us?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Solara Active Pharma Sciences insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example, Solara Active Pharma Sciences has 3 warning signs (and 2 which are significant) we think you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.