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We often see insiders buying up shares in companies that perform well over the long term. 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 Ashok Leyland Limited (NSE:ASHOKLEY).
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 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.’
See our latest analysis for Ashok Leyland
Ashok Leyland Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when CEO, MD & Wholetime Director Vinod Dasari sold ₹253m worth of shares at a price of ₹79.06 per share. That means that an insider was selling shares at slightly below the current price (₹86.60). While their view may have changed since they sold, this isn’t a particularly bullish sign. We generally consider it a negative if insiders have been selling on market, especially if they did so below the current price. Please note, however, that this single sale was 74.4% of Vinod Dasari’s stake. Vinod Dasari was the only individual insider to sell over the last year.
You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insider Ownership of Ashok Leyland
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. Our data suggests Ashok Leyland insiders own 0.05% of the company, worth about ₹130m. However, it’s possible that insiders might have an indirect interest through a more complex structure. We prefer to see high levels of insider ownership.
So What Do The Ashok Leyland Insider Transactions Indicate?
An insider sold Ashok Leyland shares recently, but they didn’t buy any. And even if we look to the last year, we didn’t see any purchases. But since Ashok Leyland is profitable and growing, we’re not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .