Selling Godha Cabcon & Insulation Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders

Godha Cabcon & Insulation Limited's (NSE:GODHA) stock price has dropped 16% in the previous week, but insiders who sold ₹121m in stock over the past year have had less luck. Insiders might have been better off holding onto their shares, given that the average selling price of ₹1.99 is still below the current share price.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Godha Cabcon & Insulation

The Last 12 Months Of Insider Transactions At Godha Cabcon & Insulation

In the last twelve months, the biggest single sale by an insider was when the Women Executive Director, Madhu Godha, sold ₹28m worth of shares at a price of ₹2.79 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is ₹0.80. So it may not tell us anything about how insiders feel about the current share price. Madhu Godha was the only individual insider to sell over the last year.

Madhu Godha sold a total of 60.68m shares over the year at an average price of ₹1.99. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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).

Does Godha Cabcon & Insulation 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Godha Cabcon & Insulation insiders own about ₹389m worth of shares (which is 73% of the company). 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 Godha Cabcon & Insulation Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Godha Cabcon & Insulation insider transactions don't fill us with confidence. 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. In terms of investment risks, we've identified 5 warning signs with Godha Cabcon & Insulation and understanding them should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.