This Insider Has Just Sold Shares In Menon Bearings

We wouldn't blame Menon Bearings Limited (NSE:MENONBE) shareholders if they were a little worried about the fact that Nitin Menon, the Executive Chairman recently netted about ₹114m selling shares at an average price of ₹117. However, that sale only accounted for 5.0% of their holding, so arguably it doesn't say much about their conviction.

Check out our latest analysis for Menon Bearings

The Last 12 Months Of Insider Transactions At Menon Bearings

Notably, that recent sale by Nitin Menon is the biggest insider sale of Menon Bearings shares that we've seen in the last year. That means that an insider was selling shares at slightly below the current price (₹133). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 5.0% of Nitin Menon's holding.

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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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. A high insider ownership often makes company leadership more mindful of shareholder interests. Menon Bearings insiders own 46% of the company, currently worth about ₹3.4b based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Menon Bearings Tell Us?

An insider sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. While it's good to be aware of 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. While conducting our analysis, we found that Menon Bearings has 3 warning signs and it would be unwise to ignore them.

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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.