Have L.G. Balakrishnan & Bros Limited (NSE:LGBBROSLTD) Insiders Been Selling Their Stock?

We'd be surprised if L.G. Balakrishnan & Bros Limited (NSE:LGBBROSLTD) shareholders haven't noticed that the Non-Executive Director, Vijayakumar Rajvirdhan, recently sold ₹26m worth of stock at ₹258 per share. However, the silver lining is that the sale only reduced their total holding by 3.5%, so we're hesitant to read anything much into it, on its own.

Check out our latest analysis for L.G. Balakrishnan & Bros

L.G. Balakrishnan & Bros Insider Transactions Over The Last Year

Notably, that recent sale by Vijayakumar Rajvirdhan is the biggest insider sale of L.G. Balakrishnan & Bros shares that we've seen in the last year. So it's clear an insider wanted to take some cash off the table, even below the current price of ₹266. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 3.5% of Vijayakumar Rajvirdhan's holding.

Insiders in L.G. Balakrishnan & Bros didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does L.G. Balakrishnan & Bros Boast High 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. We usually like to see fairly high levels of insider ownership. Insiders own 35% of L.G. Balakrishnan & Bros shares, worth about ₹2.9b. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About L.G. Balakrishnan & Bros Insiders?

Insiders sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 3 warning signs for L.G. Balakrishnan & Bros you should know about.

Of course L.G. Balakrishnan & Bros may not be the best stock to buy. So you may wish to see this free collection of high quality 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, but not derivative transactions.

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