We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Ajmera Realty & Infra India Limited (NSE:AJMERA), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
The Last 12 Months Of Insider Transactions At Ajmera Realty & Infra India
Chairman & MD Rajnikant Ajmera made the biggest insider purchase in the last 12 months. That single transaction was for ₹359m worth of shares at a price of ₹240 each. So it’s clear an insider wanted to buy, even at a higher price. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. It’s not at all bad to see insiders buy shares at or above current prices. Notably Rajnikant Ajmera was also the biggest seller, having sold ₹105m worth of shares.
Over the last year, we can see that insiders have bought 2.00m shares worth ₹470m. But they sold 508.24k for ₹105m. Overall, Ajmera Realty & Infra India insiders were net buyers last year. The average buy price was around ₹235. I’d consider this a positive as it suggests insiders see value at around the current price, which is ₹171. You can see the insider transactions (by 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!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at Ajmera Realty & Infra India Have Sold Stock Recently
We have seen a bit of insider selling at Ajmera Realty & Infra India, over the last three months. Group Chief Financial Officer Om Gandhi sold just ₹2.9m worth of shares in that time. Neither the lack of buying nor the presence of selling is heartening. But the volume sold is so low that it really doesn’t bother us.
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. Ajmera Realty & Infra India insiders own about ₹1.0b worth of shares. That equates to 17% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Ajmera Realty & Infra India Insiders?
An insider sold stock recently, but they haven’t been buying. But we take heart from prior transactions. We are also comforted by the high levels of insider ownership. So we’re happy to look past recent trading. Along with insider transactions, I recommend checking if Ajmera Realty & Infra India is growing revenue. This free chart of historic revenue and earnings should make that easy.
But note: Ajmera Realty & Infra India 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.