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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 Cyient Limited (NSE:CYIENT).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. 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 Cyient
The Last 12 Months Of Insider Transactions At Cyient
In the last twelve months, the biggest single purchase by an insider was when Founder & Executive Chairman B. V. R. Reddy bought ₹6.2m worth of shares at a price of ₹616 per share. That means that an insider was happy to buy shares at around the current price. Of course they may have changed their mind. But this suggests they are optimistic. We generally consider it a positive if insiders have been buying on market, even if the share price has increased a bit since then.
Happily, we note that in the last year insiders paid ₹7.8m for 12.61k shares. But they sold 5.70k for ₹3.6m. In total, Cyient insiders bought more than they sold over the last year. Their average price was about ₹621. I’d consider this a positive as it suggests insiders see value at around the current price, which is ₹618. You can see a visual depiction of insider transactions over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Cyient 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.
Insiders at Cyient Have Bought Stock Recently
Over the last quarter, Cyient insiders have spent a meaningful amount on shares. We can see that B. V. R. Reddy paid ₹6.2m for shares in the company. No-one sold. This could be interpreted as suggesting a positive outlook.
Insider Ownership of Cyient
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. Cyient insiders own about ₹70m worth of shares (which is 7.2% of the company). Overall, this level of ownership isn’t that impressive, but it’s certainly better than nothing!