Selling Pavna Industries Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders

Pavna Industries Limited's (NSE:PAVNAIND) value has fallen 11% in the last week, but insiders who sold ₹125m worth of stock over the last year have had less success. Insiders would probably have been better off holding on to their shares given that the average selling price of ₹570 is still lower than the current share price.

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.

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Pavna Industries Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Chief Financial Officer, Palak Jain, for ₹21m worth of shares, at about ₹565 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of ₹313. So it may not shed much light on insider confidence at current levels. Palak Jain was the only individual insider to sell over the last year.

Palak Jain sold a total of 219.56k shares over the year at an average price of ₹570. The chart below shows insider transactions (by companies and 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!

Check out our latest analysis for Pavna Industries

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Does Pavna Industries 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. Pavna Industries insiders own about ₹3.0b worth of shares (which is 68% 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 Pavna Industries Tell Us?

It doesn't really mean much that no insider has traded Pavna Industries shares in the last quarter. While we feel good about high insider ownership of Pavna Industries, we can't say the same about the selling of shares. 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. Our analysis shows 4 warning signs for Pavna Industries (1 can't be ignored!) and we strongly recommend you look at these before investing.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

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.