Have Cholamandalam Investment and Finance Company Limited (NSE:CHOLAFIN) Insiders Been Selling Their Stock?

We note that a Cholamandalam Investment and Finance Company Limited (NSE:CHOLAFIN) insider, Babu V., recently sold ₹1.6m worth of stock for ₹302 per share. It might not be a huge sale, but it did reduce their holding size 22%, hardly encouraging.

See our latest analysis for Cholamandalam Investment and Finance

The Last 12 Months Of Insider Transactions At Cholamandalam Investment and Finance

Over the last year, we can see that the biggest insider sale was by the insider, M. V. Subbiah, for ₹231m worth of shares, at about ₹306 per share. That means that even when the share price was slightly below the current price of ₹311, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can’t be sure if it does mean insiders think the shares are fully valued, so it’s only a weak sign. It is worth noting that this sale was only 38% of M. V. Subbiah’s holding.

Over the last year, we note insiders sold 2253100 shares worth ₹622m. In the last year Cholamandalam Investment and Finance insiders didn’t buy any company stock. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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NSEI:CHOLAFIN Recent Insider Trading, September 29th 2019
NSEI:CHOLAFIN Recent Insider Trading, September 29th 2019

Does Cholamandalam Investment and Finance Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 1.6% of Cholamandalam Investment and Finance shares, worth about ₹3.9b. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Cholamandalam Investment and Finance Insiders?

An insider sold Cholamandalam Investment and Finance shares recently, but they didn’t buy any. And even if we look to the last year, we didn’t see any purchases. But it is good to see that Cholamandalam Investment and Finance is growing earnings. The company boasts high insider ownership, but we’re a little hesitant, given the history of share sales. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Cholamandalam Investment and Finance.

But note: Cholamandalam Investment and Finance may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.