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We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 we’ll take a look at whether insiders have been buying or selling shares in VIP Industries Limited (NSE:VIPIND).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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.’
Check out our latest analysis for VIP Industries
The Last 12 Months Of Insider Transactions At VIP Industries
Executive Chairman & MD Dilip Piramal made the biggest insider purchase in the last 12 months. That single transaction was for ₹25m worth of shares at a price of ₹385 each. That means that an insider was happy to buy shares at around the current price. Of course they may have changed their mind. But this suggests they are optimistic. In any event it’s generally a positive if insiders are buying shares at around the current price. The only individual insider to buy over the last year was Dilip Piramal.
Dilip Piramal bought a total of 147.60k shares over the year at an average price of ₹387. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insider Ownership of VIP Industries
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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. Insiders own 5.7% of VIP Industries shares, worth about ₹3.5b. 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 Do The VIP Industries Insider Transactions Indicate?
It doesn’t really mean much that no insider has traded VIP Industries shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. With high insider ownership and encouraging transactions, it seems like VIP Industries insiders think the business has merit. Of course, the future is what matters most. So if you are interested in VIP Industries, you should check out this free report on analyst forecasts for the company.