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We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Oriental Hotels Limited (NSE:ORIENTHOT).
Do Insider Transactions Matter?
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.
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.’
Check out our latest analysis for Oriental Hotels
The Last 12 Months Of Insider Transactions At Oriental Hotels
In the last twelve months, the biggest single purchase by an insider was when Non-Executive Director D. Reddy bought ₹4.3m worth of shares at a price of ₹44.96 per share. 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. We generally consider it a positive if insiders have been buying on market, even above the current price. D. Reddy was the only individual insider to buy over the year. Notably D. Reddy was also the biggest seller, having sold ₹3.7m worth of shares.
D. Reddy bought 331.35k shares over the last 12 months at an average price of ₹42.15. 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!
Oriental Hotels is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Oriental Hotels insiders own about ₹2.1b worth of shares. That equates to 29% of the company. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.