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 DCM Nouvelle Limited (NSE:DCMNVL), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a 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 equally, we would consider it foolish to ignore insider transactions altogether. 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.'
View our latest analysis for DCM Nouvelle
DCM Nouvelle Insider Transactions Over The Last Year
Notably, that recent purchase by insider Hemant Ram was not the only time they bought DCM Nouvelle shares this year. They previously made an even bigger purchase of ₹1.2m worth of shares at a price of ₹28.27 per share. So it's clear an insider wanted to buy, at around the current price, which is ₹33.30. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. In this case we're pleased to report that the insider bought shares at close to current prices. Hemant Ram was the only individual insider to buy over the year.
Hemant Ram bought 52327 shares over the last 12 months at an average price of ₹28.41. 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Does DCM Nouvelle 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 DCM Nouvelle insiders own 53% of the company, worth about ₹308m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.