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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 before you buy or sell Uniply Industries Limited (NSE:UNIPLY), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
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The Last 12 Months Of Insider Transactions At Uniply Industries
Executive Chairman Keshav Kantamneni made the biggest insider sale in the last 12 months. That single transaction was for ₹199m worth of shares at a price of ₹77.80 each. That is hardly a positive sign, even though it took place above the latest price (₹57.35). So it may not shed much light on insider confidence at current levels. Keshav Kantamneni was the only individual insider to sell over the last year. Notably Keshav Kantamneni was also the biggest buyer, having purchased ₹124m worth of shares.
You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like Uniply Industries better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Uniply Industries insiders own 22% of the company, worth about ₹2.1b. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.