Mold-Tek Technologies Limited (NSE:MOLDTECH) up 14%, but insiders miss out having sold stock earlier this year

By
Simply Wall St
Published
November 22, 2021
NSEI:MOLDTECH
Source: Shutterstock

While it’s been a great week for Mold-Tek Technologies Limited (NSE:MOLDTECH) shareholders after stock gained 14%, they should consider it with a grain of salt. The fact that insiders chose to dispose of ₹8.8m worth of stock in the past 12 months even though prices were relatively low could be indicative of some anticipated weakness.

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.

Check out our latest analysis for Mold-Tek Technologies

Mold-Tek Technologies Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Adivishnu Sundeep, sold ₹4.8m worth of shares at a price of ₹66.83 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of ₹84.80. 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. We note that the biggest single sale was only 13% of Adivishnu Sundeep's holding.

Insiders in Mold-Tek Technologies didn't buy any shares in the last year. 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!

insider-trading-volume
NSEI:MOLDTECH Insider Trading Volume November 23rd 2021

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).

Insider Ownership of Mold-Tek Technologies

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Mold-Tek Technologies insiders own about ₹1.3b worth of shares (which is 52% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Mold-Tek Technologies Insiders?

The fact that there have been no Mold-Tek Technologies insider transactions recently certainly doesn't bother us. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Mold-Tek Technologies insider transactions don't fill us with confidence. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Mold-Tek Technologies.

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, but not derivative transactions.

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.

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