CIE Automotive India Insiders Sell ₹1.8b Of Stock, Possibly Signalling Caution

The fact that multiple CIE Automotive India Limited (NSE:CIEINDIA) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for CIE Automotive India

The Last 12 Months Of Insider Transactions At CIE Automotive India

In the last twelve months, the biggest single sale by an insider was when the Non-Executive Non-Independent Director, Anil Haridass, sold ₹882m worth of shares at a price of ₹441 per share. That means that an insider was selling shares at slightly below the current price (₹583). 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. We note that the biggest single sale was 52% of Anil Haridass's holding.

CIE Automotive India insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Insiders At CIE Automotive India Have Sold Stock Recently

The last three months saw significant insider selling at CIE Automotive India. In total, insider Hari Krishnan dumped ₹12m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership Of CIE Automotive India

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 0.9% of CIE Automotive India shares, worth about ₹2.0b. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The CIE Automotive India Insider Transactions Indicate?

An insider sold CIE Automotive India shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. On the plus side, CIE Automotive India makes money, and is growing profits. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that CIE Automotive India has 1 warning sign and it would be unwise to ignore this.

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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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com