It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Sun Pharma Advanced Research Company Limited (NSE:SPARC), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Sun Pharma Advanced Research Insider Transactions Over The Last Year
The , Jayant Sanghvi, made the biggest insider sale in the last 12 months. That single transaction was for ₹99m worth of shares at a price of ₹398 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (₹183). So it may not tell us anything about how insiders feel about the current share price. Jayant Sanghvi was the only individual insider to sell shares in the last twelve months.
Jayant Sanghvi sold a total of 306k shares over the year at an average price of ₹395. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
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Many investors like to check how much of a company is owned by insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Insiders own 14% of Sun Pharma Advanced Research shares, worth about ₹6.8b. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Sun Pharma Advanced Research Insider Transactions Indicate?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. It’s great to see high levels of insider ownership, but looking back at the last year, we don’t gain confidence from the Sun Pharma Advanced Research insiders selling. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
Of course Sun Pharma Advanced Research may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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