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In trading on Friday, shares of Syntel Inc. (Symbol: SYNT) touched a new 52-week low of $17.80/share. That's a $33.12 share price drop, or -65.04% decline from the 52-week high of $50.92 set back on 04/04/2016. Large percentage drops always require that the stock post even larger percentage gains from the low in order to recover the old price point, and for SYNT that means the stock would have to gain 186.07% to get back to the 52-week high. For a move like that, Syntel Inc. would need fundamental strength at the business level.
Here's a rhetorical question: Who knows more about fundamentals at the business level than the company's own insiders? So let's take a look to see whether any company insiders were taking the other side of the trade as SYNT shares were being sold down to this new 52-week low, focusing on the most recent trailing six month period. As summarized by the table below, SYNT has seen 7 different instances of insiders buying over the past six months.
Purchased
Insider
Title
Shares
Price/Share
Value
11/21/2016
Paritosh K. Choksi
Director
20,000
$19.50
$389,964.00
11/21/2016
Thomas Doeke
Director
3,000
$19.44
$58,331.10
11/22/2016
Vinod Kumar Sahney
Director
2,500
$19.41
$48,525.00
12/05/2016
Daniel M. Moore
Chief Administrative Officer
4,297
$19.99
$85,910.78
12/05/2016
Rakesh Khanna
Interim CEO and President
2,927
$20.00
$58,529.76
12/06/2016
Rex E. Schlaybaugh Jr.
Director
2,000
$19.60
$39,199.80
12/15/2016
Anil Agrawal
Chief Financial Officer
1,162
$19.59
$22,768.11
In the short run, while the new 52-week low suggests the stock is at the cheapest price and perhaps therefore the best bargain it has been over the last 52 weeks, the low print also means anyone who has purchased the stock over that timeframe is staring at an unrealized loss. Oftentimes, that factor drives a stock's technical analysis metrics by creating overhead resistance, with investors who bought higher now anxious to reverse their trade once they are back to breakeven. The chart below shows where SYNT has traded over the past year, with the 50-day and 200-day moving averages included.
Time will tell whether the insider purchases foretell a future rebound for SYNT shares, which are presently showing a last trade of $17.94/share, slightly above the new 52-week low.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
