We’d be surprised if Cholamandalam Investment and Finance Company Limited (NSE:CHOLAFIN) shareholders haven’t noticed that the President & Business Head of Home Loans, Rohit Phadke, recently sold ₹12m worth of stock at ₹345 per share. The eyebrow raising move amounted to a reduction of 30% in their holding.
Cholamandalam Investment and Finance Insider Transactions Over The Last Year
The insider, M. V. Subbiah, made the biggest insider sale in the last 12 months. That single transaction was for ₹231m worth of shares at a price of ₹306 each. That means that an insider was selling shares at slightly below the current price (₹339). 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don’t know for sure what they think of the stock price. This single sale was just 38% of M. V. Subbiah’s stake.
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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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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. It appears that Cholamandalam Investment and Finance insiders own 1.5% of the company, worth about ₹4.1b. 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 Do The Cholamandalam Investment and Finance Insider Transactions Indicate?
Insiders sold stock recently, but they haven’t been buying. And there weren’t any purchases to give us comfort, over the last year. But since Cholamandalam Investment and Finance is profitable and growing, we’re not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Cholamandalam Investment and Finance.
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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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