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 we'll take a look at whether insiders have been buying or selling shares in Srikalahasthi Pipes Limited (NSE:SRIPIPES).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
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 Srikalahasthi Pipes
The Last 12 Months Of Insider Transactions At Srikalahasthi Pipes
Over the last year, we can see that the biggest insider purchase was by MD & Executive Director Mayank Kejriwal for ₹8.4m worth of shares, at about ₹168 per share. So it's clear an insider wanted to buy, at around the current price, which is ₹193. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Srikalahasthi Pipes share holders is that insiders were buying at near the current price.
Happily, we note that in the last year insiders paid ₹11m for 62005 shares. On the other hand they divested 10000 shares, for ₹1.8m. In total, Srikalahasthi Pipes insiders bought more than they sold over the last year. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Srikalahasthi Pipes is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. From our data, it seems that Srikalahasthi Pipes insiders own 4.4% of the company, worth about ₹386m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!