Mangalam Cement Limited (NSE:MANGLMCEM) Insiders Increased Their Holdings

It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So we’ll take a look at whether insiders have been buying or selling shares in Mangalam Cement Limited (NSE:MANGLMCEM).

What Is Insider Selling?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year’.

See our latest analysis for Mangalam Cement

Mangalam Cement Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Executive Co-Chairperson Anshuman Jalan bought ₹5.3m worth of shares at a price of ₹178 per share. We do like to see buying, but this purchase was made at well below the current price of ₹281. Because it occurred at a lower valuation, it doesn’t tell us much about whether insiders might find today’s price attractive.

While Mangalam Cement insiders bought shares during the last year, they didn’t sell. 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!

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

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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. It appears that Mangalam Cement insiders own 17% of the company, worth about ₹1.3b. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Mangalam Cement Tell Us?

The fact that there have been no Mangalam Cement insider transactions recently certainly doesn’t bother us. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like Mangalam Cement insiders think the business has merit. 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. You’d be interested to know, that we found 1 warning sign for Mangalam Cement and we suggest you have a look.

If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity 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, but not derivative transactions.

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