Sikko Industries Limited (NSE:SIKKO) insiders who acquired shares over the previous 12 months, can probably afford to ignore the recent 13% decline in the stock price. After taking the recent loss into consideration, the ₹20.6m worth of stock they bought is now worth ₹56.3m, indicating that their investment yielded a positive return.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At Sikko Industries

In the last twelve months, the biggest single purchase by an insider was when MD & Executive Non-Independent Director Jayantibhai Kumbhani bought ₹21m worth of shares at a price of ₹2.00 per share. Even though the purchase was made at a significantly lower price than the recent price (₹5.46), we still think insider buying is a positive. 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. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for Sikko Industries

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Insider Ownership Of Sikko Industries

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Sikko Industries insiders own 55% of the company, worth about ₹1.3b. 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 Does This Data Suggest About Sikko Industries Insiders?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Sikko Industries. One for the watchlist, at least! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Sikko Industries. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Sikko Industries.

Of course Sikko Industries may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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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Disclaimer:This article represents the opinion of the author only. It does not represent the opinion of Webull, nor should it be viewed as an indication that Webull either agrees with or confirms the truthfulness or accuracy of the information. It should not be considered as investment advice from Webull or anyone else, nor should it be used as the basis of any investment decision.