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It is not uncommon to see companies perform well in the years after insiders buy shares. 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 before you buy or sell CreditAccess Grameen Limited (NSE:CREDITACC), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
View our latest analysis for CreditAccess Grameen
CreditAccess Grameen Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the MD, CEO & Whole-Time Director, Udaya Hebbar, for ₹20m worth of shares, at about ₹370 per share. That means that even when the share price was below the current price of ₹663, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 23% of Udaya Hebbar's holding.
Over the last year, we note insiders sold 249947 shares worth ₹118m. Insiders in CreditAccess Grameen didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by individuals) 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!
I will like CreditAccess Grameen better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
CreditAccess Grameen Insiders Are Selling The Stock
Over the last three months, we've seen significant insider selling at CreditAccess Grameen. Specifically, insiders ditched ₹42m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.