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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 before you buy or sell Ratnamani Metals & Tubes Limited (NSE:RATNAMANI), 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 on the market. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
See our latest analysis for Ratnamani Metals & Tubes
The Last 12 Months Of Insider Transactions At Ratnamani Metals & Tubes
In the last twelve months, the biggest single purchase by an insider was when Whole-Time Director Jayantilal Sanghvi bought ₹22m worth of shares at a price of ₹879 per share. That implies that an insider found the current (approximate) price 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. In any event it’s generally a positive if insiders are buying shares at around the current price. Jayantilal Sanghvi was the only individual insider to buy over the year.
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!
Ratnamani Metals & Tubes is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Are Ratnamani Metals & Tubes Insiders Buying Or Selling?
We saw Jayantilal Sanghvi buy shares worth ₹22m in the last three months. However that only slightly eclipses the sales, ₹22m worth of sales. Looking at the net result, we don’t think these recent trades shed much light on how insiders, as a group, are feeling about the company’s prospects.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Ratnamani Metals & Tubes insiders own 68% of the company, currently worth about ₹28b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.