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It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we'll take a look at whether insiders have been buying or selling shares in Rico Auto Industries Limited (NSE:RICOAUTO).
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. 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'.
Check out our latest analysis for Rico Auto Industries
Rico Auto Industries Insider Transactions Over The Last Year
While no particular insider transaction stood out, we can still look at the overall trading.
While Rico Auto Industries insiders bought shares last year, they didn't sell. The average buy price was around ₹58.14. This is nice to see since it implies that insiders might see value around current prices (around ₹47.35). 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!
Rico Auto Industries 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 Rico Auto Industries Insiders Traded Recently?
We saw some Rico Auto Industries insider buying shares in the last three months. Insiders bought ₹670k worth of shares in that time. It's great to see that insiders are only buying, not selling. However, in this case the amount invested recently is quite small.
Insider Ownership of Rico Auto Industries
Many investors like to check how much of a company is owned by 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. Insiders own 24% of Rico Auto Industries shares, worth about ₹1.5b. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.