We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Gyscoal Alloys Limited (NSE:GAL).
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 on the market. 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 Gyscoal Alloys
Gyscoal Alloys Insider Transactions Over The Last Year
Chairman Viral Shah made the biggest insider sale in the last 12 months. That single transaction was for ₹8.2m worth of shares at a price of ₹9.02 each. Although we don’t gain confidence from insider selling, we note that this large sale was at well above current price of ₹5.70. So it may not shed much light on insider confidence at current levels. The only individual insider seller over the last year was Viral Shah. Notably Viral Shah was also the biggest buyer, having purchased ₹3.0m worth of shares.
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!
Gyscoal Alloys 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 Gyscoal Alloys Insiders Traded Recently?
Over the last three months, we’ve seen a bit of insider buying at Gyscoal Alloys. Chairman Viral Shah purchased ₹530k worth of shares in that period. We like it when there are only buyers, and no sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Gyscoal Alloys insiders own about ₹466m worth of shares (which is 52% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.