How Much Are Mold-Tek Packaging Limited (NSE:MOLDTKPAC) Insiders Taking Off The Table?

It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Mold-Tek Packaging Limited (NSE:MOLDTKPAC).

What Is Insider Buying?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

See our latest analysis for Mold-Tek Packaging

The Last 12 Months Of Insider Transactions At Mold-Tek Packaging

The insider, Nandiwada Padmavathi, made the biggest insider sale in the last 12 months. That single transaction was for ₹26m worth of shares at a price of ₹255 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of ₹210. So it is hard to draw any strong conclusion from it.

Over the last year we saw more insider selling of Mold-Tek Packaging shares, than buying. The sellers received a price of around ₹264, on average. It is certainly not great to see that insiders have sold shares in the company. However, we do note that the average sale price was significantly higher than the current share price (which is ₹210). You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Does Mold-Tek Packaging Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Mold-Tek Packaging insiders own about ₹2.4b worth of shares (which is 42% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Mold-Tek Packaging Tell Us?

It doesn't really mean much that no insider has traded Mold-Tek Packaging shares in the last quarter. While we feel good about high insider ownership of Mold-Tek Packaging, we can't say the same about the selling of shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Mold-Tek Packaging. Be aware that Mold-Tek Packaging is showing 4 warning signs in our investment analysis, and 1 of those is a bit unpleasant...

Of course Mold-Tek Packaging 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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