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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 we'll take a look at whether insiders have been buying or selling shares in Asian Hotels (West) Limited (NSE:AHLWEST).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
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.'
See our latest analysis for Asian Hotels (West)
Asian Hotels (West) Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Executive Whole Time Director Sandeep Gupta bought ₹6.2m worth of shares at a price of ₹309 per share. That means that an insider was happy to buy shares at above the current price of ₹278. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. The only individual insider to buy over the last year was Sandeep Gupta.
Sandeep Gupta bought 77119 shares over the last 12 months at an average price of ₹325. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
Asian Hotels (West) is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Asian Hotels (West)
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Asian Hotels (West) insiders own about ₹1.1b worth of shares. That equates to 36% 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.