Have Omax Autos Limited (NSE:OMAXAUTO) Insiders Been Selling Their Stock?

We note that the Omax Autos Limited (NSE:OMAXAUTO) MD & Director, Ravinder Mehta, recently sold ₹214k worth of stock for ₹42.88 per share. It wasn't a huge sale, but it did reduce their holding by 10%. This does not instill confidence.

Check out our latest analysis for Omax Autos

The Last 12 Months Of Insider Transactions At Omax Autos

In fact, the recent sale by Ravinder Mehta was the biggest sale of Omax Autos shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at slightly below the current price (₹47.50). 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. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 10% of Ravinder Mehta's holding.

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!

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Does Omax Autos Boast High 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's great to see that Omax Autos insiders own 44% of the company, worth about ₹447m. 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 Omax Autos Insider Transactions Indicate?

An insider sold Omax Autos shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. But it is good to see that Omax Autos is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. While we like knowing 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. When we did our research, we found 5 warning signs for Omax Autos (2 shouldn't be ignored!) that we believe deserve your full attention.

Of course Omax Autos 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, but not derivative transactions.

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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. 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.
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