Last week, Regaal Resources Limited (NSE:REGAAL) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 22% last week, resulting in a ₹1.8b increase in the company's market worth, implying a 45% gain on their initial purchase. As a result, the stock they originally bought for ₹23.4m is now worth ₹34.0m.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At Regaal Resources
Over the last year, we can see that the biggest insider purchase was by Founder Anil Kishorepuria for ₹23m worth of shares, at about ₹66.98 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of ₹97.21. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
See our latest analysis for Regaal Resources
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insider Ownership
Many investors like to check how much of a company is owned by 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. Regaal Resources insiders own about ₹5.4b worth of shares (which is 54% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Regaal Resources Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Regaal Resources shares in the last quarter. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like Regaal Resources insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Regaal Resources. When we did our research, we found 2 warning signs for Regaal Resources (1 is a bit unpleasant!) that we believe deserve your full attention.
But note: Regaal Resources 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.