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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 we’ll take a look at whether insiders have been buying or selling shares in Bajaj Electricals Limited (NSE:BAJAJELEC).
What Is Insider Selling?
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, 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.’
View our latest analysis for Bajaj Electricals
Bajaj Electricals Insider Transactions Over The Last Year
While there weren’t any large insider transactions in the last twelve months, it’s still worth looking at the trading.
In the last twelve months insiders purchased 5.50k shares for ₹3.0m. But insiders sold 30.49k shares worth ₹17m. All up, insiders sold more shares in Bajaj Electricals than they bought, over the last year. The sellers received a price of around ₹556, on average. Insider selling doesn’t make us excited to buy. However, we do note that the average sale price was significantly higher than the current share price (which is ₹458). You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Bajaj Electricals Insiders Are Selling The Stock
Over the last three months, we’ve seen significant insider selling at Bajaj Electricals. Specifically, insiders ditched ₹5.9m worth of shares in that time, and we didn’t record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership of Bajaj Electricals
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. It’s great to see that Bajaj Electricals insiders own 18% of the company, worth about ₹8.7b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.