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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 shareholders might well want to know whether insiders have been buying or selling shares in Regency Ceramics Limited (NSE:REGENCERAM).
What Is Insider Selling?
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, rules govern insider transactions, and certain disclosures are required.
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 Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
View our latest analysis for Regency Ceramics
The Last 12 Months Of Insider Transactions At Regency Ceramics
There wasn't any very large single transaction over the last year, but we can still observe some trading.
Over the last year, we can see that insiders have bought 628k shares worth ₹1.7m. Regency Ceramics may have bought shares in the last year, but they didn't sell any. The average buy price was around ₹2.69. I'd consider this a positive as it suggests insiders see value at around the current price, which is ₹2.50. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insider Ownership of Regency Ceramics
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Regency Ceramics insiders own 70% of the company, currently worth about ₹46m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Regency Ceramics Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Regency Ceramics shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. With high insider ownership and encouraging transactions, it seems like Regency Ceramics insiders think the business has merit. Along with insider transactions, I recommend checking if Regency Ceramics is growing revenue. This free chart of historic revenue and earnings should make that easy.