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It is not uncommon to see companies perform well in the years after insiders buy shares. 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 we'll take a look at whether insiders have been buying or selling shares in Brigade Enterprises Limited (NSE:BRIGADE).
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, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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'.
Check out our latest analysis for Brigade Enterprises
Brigade Enterprises Insider Transactions Over The Last Year
There wasn't any very large single transaction over the last year, but we can still observe some trading.
In the last twelve months insiders netted ₹9.3m for 41846 shares sold. Insiders in Brigade Enterprises didn't buy any shares in the last year. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Brigade Enterprises better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Brigade Enterprises Insiders Are Selling The Stock
We have seen a bit of insider selling at Brigade Enterprises, over the last three months. G. Sriram divested only ₹1.0m worth of shares in that time. It's not great to see insider selling, nor the lack of recent buyers. But the selling simply isn't sufficiently substantial to be of much use as a signal.
Does Brigade Enterprises Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Brigade Enterprises insiders own 65% of the company, worth about ₹21b. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.