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We often see insiders buying up shares in companies that perform well over the long term. 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 shareholders might well want to know whether insiders have been buying or selling shares in Everest Industries Limited (NSE:EVERESTIND).
What Is Insider Buying?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. 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. 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 Everest Industries
The Last 12 Months Of Insider Transactions At Everest Industries
Over the last year, we can see that the biggest insider sale was by MD & Executive Director Manish Sanghi for ₹5.5m worth of shares, at about ₹552 per share. Although we don’t gain confidence from insider selling, we note that this large sale was at well above current price of ₹442. So it may not shed much light on insider confidence at current levels.
We note that in the last year insiders divested 39.43k shares for a total of ₹22m. Over the last year we saw more insider selling of Everest Industries shares, than buying. The sellers received a price of around ₹548, on average. It is certainly not great to see that insiders have sold shares in the company. But the selling was at much higher prices than the current share price (₹442), so it probably doesn’t tell us a lot about the value on offer today. 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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insider Ownership of Everest Industries
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. 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 11% of Everest Industries shares, worth about ₹743m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.