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 shareholders might well want to know whether insiders have been buying or selling shares in Tejas Networks Limited (NSE:TEJASNET).
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 would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.
Tejas Networks Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the insider, Sunil Handoo, sold ₹4.9m worth of shares at a price of ₹89.16 per share. While we don’t usually like to see insider selling, it’s more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of ₹53.10. So it may not shed much light on insider confidence at current levels.
In the last year Tejas Networks insiders didn’t buy any company stock. 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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Does Tejas Networks Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Our data indicates that Tejas Networks insiders own about ₹352m worth of shares (which is 7.5% of the company). However, it’s possible that insiders might have an indirect interest through a more complex structure. We do generally prefer see higher levels of insider ownership.
What Might The Insider Transactions At Tejas Networks Tell Us?
The fact that there have been no Tejas Networks insider transactions recently certainly doesn’t bother us. While we feel good about high insider ownership of Tejas Networks, we can’t say the same about the selling of shares. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Tejas Networks. While conducting our analysis, we found that Tejas Networks has 3 warning signs and it would be unwise to ignore them.
Of course Tejas Networks may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.