Hubtown Insider Buyers See Boost After Market Cap Rose ₹2.5b

Insiders who bought Hubtown Limited (NSE:HUBTOWN) stock in the last 12 months were richly rewarded last week. The company's market value increased by ₹2.5b as a result of the stock's 13% gain over the same period. As a result, the stock they originally bought for ₹205.2m is now worth ₹1.00b.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Hubtown

Hubtown Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when MD & Executive Director Vyomesh Shah bought ₹205m worth of shares at a price of ₹57.00 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of ₹278. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Hubtown is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insider Ownership Of Hubtown

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Hubtown insiders own 48% of the company, currently worth about ₹11b based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Hubtown Insiders?

It doesn't really mean much that no insider has traded Hubtown shares in the last quarter. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like Hubtown insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Hubtown. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Hubtown.

But note: Hubtown may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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 of direct interests only, but not derivative transactions or indirect interests.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.