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 before you buy or sell Zydus Wellness Limited (NSE:ZYDUSWELL), you may well want to know whether insiders have been buying or selling.

Do Insider Transactions Matter?

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, most countries require that the company discloses such transactions to the market.

We don't think shareholders should simply follow insider transactions. 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.'

See our latest analysis for Zydus Wellness

The Last 12 Months Of Insider Transactions At Zydus Wellness

In the last twelve months, the biggest single purchase by an insider was when insider Pankaj Patel bought ₹3.0b worth of shares at a price of ₹1,385 per share. That implies that an insider found the current price of ₹1,501 per share to be enticing. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. Happily, the Zydus Wellness insiders decided to buy shares at close to current prices.

Over the last year, we can see that insiders have bought 2.2m shares worth ₹3.0b. But they sold 436 for ₹569k. In the last twelve months there was more buying than selling by Zydus Wellness insiders. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Zydus Wellness is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does Zydus Wellness Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Zydus Wellness insiders own 5.4% of the company, worth about ₹4.6b. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.