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We often see insiders buying up shares in companies that perform well over the long term. 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 Avenue Supermarts Limited (NSE:DMART).
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 on the market. 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. For example, a Colombia 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 Avenue Supermarts
The Last 12 Months Of Insider Transactions At Avenue Supermarts
Radhakishan Damani made the biggest insider sale in the last 12 months. That single transaction was for ₹1.6b worth of shares at a price of ₹1,363 each. So it’s clear an insider wanted to take some cash off the table, even below the current price of ₹1,646. Even though it doesn’t necessarily mean anything, that’s certainly not a positive sign, in our book. When an insider sells below the current price, it does tend to make us wonder about the current valuation. Please note, however, that this single sale was just 0.5% of Radhakishan Damani’s stake.
Happily, we note that in the last year insiders paid ₹189m for 125.88k shares. On the other hand they divested 8.85m shares, for ₹6.3b. All up, insiders sold more shares in Avenue Supermarts than they bought, over the last year. The sellers received a price of around ₹716, on average. It’s not too encouraging to see that insiders have sold at below the current price. Of course, the sales could be motivated for a multitude of reasons, so we shouldn’t jump to conclusions. You can see a visual depiction of insider transactions 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!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at Avenue Supermarts Have Sold Stock Recently
We’ve seen more insider selling than insider buying at Avenue Supermarts recently. In total, insiders sold ₹1.1b worth of shares in that time. Meanwhile insiders bought ₹42m worth. Because the selling vastly outweighs the buying, we’d say this is a somewhat bearish sign.