Don't Ignore The Insider Selling In Om Infra

Some Om Infra Limited (NSE:OMINFRAL) shareholders may be a little concerned to see that the Chairman Emeritus, Chandra Kothari, recently sold a substantial ₹49m worth of stock at a price of ₹130 per share. That sale reduced their total holding by 22% which is hardly insignificant, but far from the worst we've seen.

View our latest analysis for Om Infra

The Last 12 Months Of Insider Transactions At Om Infra

In fact, the recent sale by Chandra Kothari was the biggest sale of Om Infra shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was below the current price of ₹167, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 22% of Chandra Kothari's stake.

Om Infra insiders didn't buy any shares over 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!

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Insider Ownership

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Om Infra insiders own 56% of the company, worth about ₹9.1b. 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 Om Infra Tell Us?

Insiders sold Om Infra shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. But since Om Infra is profitable and growing, we're not too worried by this. 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 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 3 warning signs for Om Infra (of which 1 shouldn't be ignored!) you should know about.

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 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com