Shareholders May Not Overlook Lokesh Machines Insiders Selling ₹50m In Stock

Last week, Lokesh Machines Limited's (NSE:LOKESHMACH) stock jumped 24%, but insiders who sold ₹50m worth of stock in over the past year are likely to be in a better position. Selling at an average price of ₹351, which is higher than the current price might have been the right call as holding on to stock would have meant their investment would be worth less now than it was at the time of sale.

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.

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Lokesh Machines Insider Transactions Over The Last Year

The insider, Ajay Mullapudi, made the biggest insider sale in the last 12 months. That single transaction was for ₹15m worth of shares at a price of ₹350 each. While we don't usually like to see insider selling, it's more concerning if the sales take place 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 ₹170. So it is hard to draw any strong conclusion from it.

Lokesh Machines insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for Lokesh Machines

I will like Lokesh Machines better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership Of Lokesh Machines

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Lokesh Machines insiders own 57% of the company, currently worth about ₹1.8b 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.

So What Does This Data Suggest About Lokesh Machines Insiders?

The fact that there have been no Lokesh Machines insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of Lokesh Machines, we can't say the same about the selling of shares. 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. Every company has risks, and we've spotted 4 warning signs for Lokesh Machines (of which 1 makes us a bit uncomfortable!) you should know about.

But note: Lokesh Machines 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 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.