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As Orbit Exports Limited (NSE:ORBTEXP) hits ₹3.8b market cap, insiders may be dismayed about not purchasing higher quantities


Insiders who bought Orbit Exports Limited (NSE:ORBTEXP) stock in the last 12 months were richly rewarded last week. The company’s market value increased by ₹724m as a result of the stock’s 24% gain over the same period. Put another way, the original ₹23m acquisition is now worth ₹36m.

Although we don’t think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Orbit Exports

The Last 12 Months Of Insider Transactions At Orbit Exports

Over the last year, we can see that the biggest insider sale was by the Non-Executive Non-Independent Director, Varun Daga, for ₹16m worth of shares, at about ₹80.08 per share. So it’s clear an insider wanted to take some cash off the table, even below the current price of ₹138. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it’s only a weak signal. It is worth noting that this sale was only 9.9% of Varun Daga’s holding. Varun Daga was the only individual insider to sell over the last year.

Happily, we note that in the last year insiders paid ₹23m for 260.33k shares. On the other hand they divested 207.16k shares, for ₹16m. In the last twelve months there was more buying than selling by Orbit Exports insiders. The average buy price was around ₹87.89. To my mind it is good that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today’s share price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

NSEI:ORBTEXP Insider Trading Volume August 3rd 2022

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.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Orbit Exports insiders own 72% of the company, currently worth about ₹2.7b 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 Do The Orbit Exports Insider Transactions Indicate?

There haven’t been any insider transactions in the last three months — that doesn’t mean much. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like Orbit Exports insiders think the business has merit. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. Be aware that Orbit Exports is showing 2 warning signs in our investment analysis, and 1 of those is a bit concerning…

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, but not derivative transactions.

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.



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