Shareholders Can't Ignore ₹124m Of Sales By Integra Essentia Insiders

Integra Essentia Limited's (NSE:ESSENTIA) stock rose 11% last week, but insiders who sold ₹124m worth of stock over the last year are probably in a more advantageous position. Holding on to stock would have meant their investment would be worth less now than it was at the time of sale. Thus selling at an average price of ₹4.57, which is higher than the current price, may have been the best decision.

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.

View our latest analysis for Integra Essentia

Integra Essentia Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Vishesh Gupta, sold ₹119m worth of shares at a price of ₹4.58 per share. 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 ₹3.16. So it is hard to draw any strong conclusion from it. The only individual insider seller over the last year was Vishesh Gupta.

Vishesh Gupta ditched 27.04m shares over the year. The average price per share was ₹4.57. 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!

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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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Integra Essentia insiders own 30% of the company, worth about ₹1.0b. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Integra Essentia Insiders?

It doesn't really mean much that no insider has traded Integra Essentia shares in the last quarter. While we feel good about high insider ownership of Integra Essentia, we can't say the same about the selling of shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 4 warning signs for Integra Essentia (1 is significant!) that we believe deserve your full attention.

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.