When to buy a stock? Is it right to pick a company, if promoters hike their stakes?

What is a right time to invest in stocks? You like that company but the price is too high, will it be a worthy call to invest your hard earned money, anytime? How to pick a right stock at a right time? Well, the questions and confusions about stock market investments are endless, but let's decode the trick which works most of the times, as per experts.

Avinash Gorakssakar, Sr. Fundamental Research Analyst believes that if the promoters hike their stake in their company, they are more confident and positive on the performance of the ongoing or upcoming business. A keen investor should grab the opportunity and enter, after researching on other parameters like fundamentals, technical, management, news etc.

Who all are promoters?

Promoters are the individuals, firms, organisations, professionals etc. who hold a key role in the functioning of a company. A promoter can be one who started the company, while investors, position holders, large shareholders, board of directors, owners, top most managers etc can also be the promoters of a particular company.

"A promoter understands the business better, as he is within the system. In case they are increasing their stakes at current or premium price of the shares, it is certainly a cushion for a fresh investor," Gorakssakar told Zee Business Online.

Anything that can work well for the company in future is planned, decided and performed by the promoters only. This is simple to understand that if a large equity shareholders\owner are happy with their business and expanding the scale, it is a good signal for investors to be the part of it.

A promoter is legally bound to never share any confidential information like company's future plans, mergers, functioning, major deals, business variations, numbers etc. As it is a crime and termed as an illegal practice of 'insider trading' as per the guidelines of Securities and Exchange Board of India (SEBI).

However, an increase in stakes by the promoter through open markets is a clear signal to follow the line.

Note: Equity markets are volatile and risky in nature. An individual discretion is important prior to particular invest