Insiders who bought Ramky Infrastructure Limited (NSE:RAMKY) in the last 12 months may probably not pay attention to the stock’s recent 16% drop. After accounting for the recent loss, the ₹16.6m worth of shares they purchased is now worth ₹29.5m, suggesting a good return on their investment.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for Ramky Infrastructure
The Last 12 Months Of Insider Transactions At Ramky Infrastructure
In the last twelve months, the biggest single purchase by an insider was when insider M. Reddy bought ₹8.3m worth of shares at a price of ₹630 per share. That means that even when the share price was higher than ₹499 (the recent price), an insider wanted to purchase shares. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
Over the last year, we can see that insiders have bought 59.14k shares worth ₹17m. But insiders sold 16.15k shares worth ₹910k. In the last twelve months there was more buying than selling by Ramky Infrastructure insiders. They paid about ₹281 on average. We don’t deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today’s share price. You can see the insider transactions (by companies and 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.
Ramky Infrastructure Insiders Bought Stock Recently
There has been significantly more insider buying, than selling, at Ramky Infrastructure, over the last three months. In total, two insiders bought ₹11m worth of shares in that time. But Chief Risk Officer Ravi Polimetla sold shares worth ₹909k. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.
Does Ramky Infrastructure 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. We usually like to see fairly high levels of insider ownership. Ramky Infrastructure insiders own 65% of the company, currently worth about ₹22b 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.
So What Does This Data Suggest About Ramky Infrastructure Insiders?
It’s certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Ramky Infrastructure. Looks promising! So while it’s helpful to know what insiders are doing in terms of buying or selling, it’s also helpful to know the risks that a particular company is facing. When we did our research, we found 3 warning signs for Ramky Infrastructure (1 is a bit concerning!) that we believe deserve your full attention.
But note: Ramky Infrastructure may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.