Stock Analysis

Insiders who sold CMI Limited (NSE:CMICABLES) earlier this year probably made the right call as market cap dropped by ₹34m

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Insiders seem to have made the most of their holdings by selling ₹37m worth of CMI Limited (NSE:CMICABLES) stock at an average sell price of ₹20.68 during the past year. The company's market valuation decreased by ₹34m after the stock price dropped 14% over the past week, but insiders were spared from painful losses.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for CMI

CMI Insider Transactions Over The Last Year

The insider, Vishwa Jain, made the biggest insider sale in the last 12 months. That single transaction was for ₹5.0m worth of shares at a price of ₹27.30 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is ₹13.55. So it may not shed much light on insider confidence at current levels.

Insiders in CMI didn't buy any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

NSEI:CMICABLES Insider Trading Volume March 16th 2023

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insider Ownership Of CMI

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. From our data, it seems that CMI insiders own 10% of the company, worth about ₹22m. We do generally prefer see higher levels of insider ownership.

So What Do The CMI Insider Transactions Indicate?

It doesn't really mean much that no insider has traded CMI shares in the last quarter. Still, the insider transactions at CMI in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some comfort. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing CMI. For instance, we've identified 6 warning signs for CMI (4 are significant) you should be aware of.

But note: CMI may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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, but not derivative transactions.

Valuation is complex, but we're helping make it simple.

Find out whether CMI is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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