Trade Alert: MD, Group CEO Of Mahindra & Mahindra Anish Shah Has Sold Stock

We wouldn't blame Mahindra & Mahindra Limited (NSE:M&M) shareholders if they were a little worried about the fact that Anish Shah, the MD, Group CEO recently netted about ₹211m selling shares at an average price of ₹2,872. That's a big disposal, and it decreased their holding size by 37%, which is notable but not too bad.

See our latest analysis for Mahindra & Mahindra

Mahindra & Mahindra Insider Transactions Over The Last Year

The insider Uma Malhotra made the biggest insider purchase in the last 12 months. That single transaction was for ₹215m worth of shares at a price of ₹1,564 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of ₹2,867. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

In the last twelve months insiders purchased 262.37k shares for ₹410m. But insiders sold 633.59k shares worth ₹1.3b. Over the last year we saw more insider selling of Mahindra & Mahindra shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

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Does Mahindra & Mahindra 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Mahindra & Mahindra insiders own 0.9% of the company, currently worth about ₹30b based on the recent share price. 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 Mahindra & Mahindra Tell Us?

The insider sales have outweighed the insider buying, at Mahindra & Mahindra, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. But it is good to see that Mahindra & Mahindra is growing earnings. 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 while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we've found that Mahindra & Mahindra has 3 warning signs (1 is significant!) that deserve your attention before going any further with your analysis.

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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