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

Ishan International Limited's (NSE:ISHAN) value has fallen 11% in the last week, but insiders who sold ₹92m 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 ₹2.15 is still lower than 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.

See our latest analysis for Ishan International

The Last 12 Months Of Insider Transactions At Ishan International

In the last twelve months, the biggest single sale by an insider was when the Chairman, Shantanu Srivastava, sold ₹89m worth of shares at a price of ₹2.23 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 ₹1.60. So it may not tell us anything about how insiders feel about the current share price. Shantanu Srivastava was the only individual insider to sell over the last year.

Shantanu Srivastava divested 42.77m shares over the last 12 months at an average price of ₹2.15. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Ishan International insiders own 48% of the company, currently worth about ₹167m 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 Ishan International Tell Us?

It doesn't really mean much that no insider has traded Ishan International shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Ishan International insiders selling. 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. For instance, we've identified 2 warning signs for Ishan International (1 is potentially serious) you should be aware of.

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.