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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 before you buy or sell Wockhardt Limited (NSE:WOCKPHARMA), 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, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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 Wockhardt
Wockhardt Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by Sanjeev Mehta for ₹13m worth of shares, at about ₹653 per share. That means that an insider was selling shares at around the current price of ₹529. While their view may have changed since the sale, this is not a particularly positive fact. Arguably, insider selling at around current prices should give us reason to reflect on whether the stock is fully valued at the moment.
In total, Wockhardt insiders sold more than they bought over the last year. The sellers received a price of around ₹554, on average. It’s not particularly great to see insiders were selling shares at below recent prices. Of course, the sales could be motivated for a multitude of reasons, so we shouldn’t jump to conclusions. You can see the insider transactions 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!
Wockhardt is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Have Wockhardt Insiders Traded Recently?
Over the last three months, we’ve seen a bit of insider buying at Wockhardt. Ajit Keskar purchased ₹461k worth of shares in that period. We like it when there are only buyers, and no sellers. However, in this case the amount invested recently is quite small.
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. Wockhardt insiders own about ₹597m worth of shares (which is 1.0% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.