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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. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in Star Cement Limited (NSE:STARCEMENT).
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.
We don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. 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 Star Cement
Star Cement Insider Transactions Over The Last Year
There wasn’t any very large single transaction over the last year, but we can still observe some trading.
Happily, we note that in the last year insiders paid ₹2.1m for 22.50k shares. On the other hand they divested 124.91k shares, for ₹13m. In total, Star Cement insiders sold more than they bought over the last year. They sold for an average price of about ₹105. We don’t gain confidence from insider selling below the recent share price. Since insiders sell for many reasons, we wouldn’t put too much weight on it. 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 like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Star Cement Insiders Bought Stock Recently
We saw some Star Cement insider buying shares in the last three months. In that period insiders spent ₹2.1m on shares. But Vinay Chamaria sold ₹1.2m worth. It is good to see that insiders have been buying, but they did not buy very many shares, in the scheme of things.
Does Star Cement Boast High Insider Ownership?
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. A high insider ownership often makes company leadership more mindful of shareholder interests. Star Cement insiders own about ₹28b worth of shares (which is 68% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.