Univastu India Insider Sellers Vindicated After 13% Drop

Insiders at Univastu India Limited (NSE:UNIVASTU) sold ₹21m worth of stock at an average price of ₹126 a share over the past year, making the most of their investment. The company’s market cap plunged by ₹390m after price dropped by 13% last week but insiders were able to limit their loss to an extent.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Univastu India

Univastu India Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Chairman & MD, Pradeep Khandagale, sold ₹6.5m worth of shares at a price of ₹146 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of ₹229. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 0.6% of Pradeep Khandagale's holding. Pradeep Khandagale was the only individual insider to sell over the last year.

Pradeep Khandagale ditched 166.09k shares over the year. The average price per share was ₹126. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

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Does Univastu India Boast High Insider Ownership?

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. We usually like to see fairly high levels of insider ownership. Univastu India insiders own about ₹2.0b worth of shares (which is 76% of the company). 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 Do The Univastu India Insider Transactions Indicate?

The fact that there have been no Univastu India insider transactions recently certainly doesn't bother us. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Univastu India insiders selling. 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 2 warning signs for Univastu India you should know about.

Of course Univastu India 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 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.