SMS Lifesciences India Reaches ₹4.4b Market Cap Benefiting Insider Stock Buying

Last week, SMS Lifesciences India Limited (NSE:SMSLIFE) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 18% last week, resulting in a ₹678m increase in the company's market worth, implying a 76% gain on their initial purchase. As a result, their original purchase of ₹5.26m worth of stock is now worth ₹9.25m.

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.

We've discovered 3 warning signs about SMS Lifesciences India. View them for free.

The Last 12 Months Of Insider Transactions At SMS Lifesciences India

In the last twelve months, the biggest single purchase by an insider was when Chief Marketing Officer & Executive Director Talluri Praveen bought ₹5.3m worth of shares at a price of ₹827 per share. Even though the purchase was made at a significantly lower price than the recent price (₹1,453), 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.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

See our latest analysis for SMS Lifesciences India

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insider Ownership Of SMS Lifesciences India

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that SMS Lifesciences India insiders own 77% of the company, worth about ₹3.4b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The SMS Lifesciences India Insider Transactions Indicate?

It doesn't really mean much that no insider has traded SMS Lifesciences India shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. With high insider ownership and encouraging transactions, it seems like SMS Lifesciences India insiders think the business has merit. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example, SMS Lifesciences India has 3 warning signs (and 1 which is a bit unpleasant) we think you should know about.

Of course SMS Lifesciences India 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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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.