Firstsource Solutions Insiders Sell ₹278m Of Stock, Possibly Signalling Caution

In the last year, many Firstsource Solutions Limited (NSE:FSL) insiders sold a substantial stake in the company which may have sparked shareholders' attention. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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Firstsource Solutions Insider Transactions Over The Last Year

The Head of Healthcare & Lifesciences, Venkatgiri Vandali, made the biggest insider sale in the last 12 months. That single transaction was for ₹86m worth of shares at a price of ₹380 each. That means that an insider was selling shares at around the current price of ₹359. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

In the last year Firstsource Solutions insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

View our latest analysis for Firstsource Solutions

I will like Firstsource Solutions 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

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 0.4% of Firstsource Solutions shares, worth about ₹1.1b. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Firstsource Solutions Insider Transactions Indicate?

The fact that there have been no Firstsource Solutions insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of Firstsource Solutions, we can't say the same about the selling of shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Firstsource Solutions. At Simply Wall St, we found 1 warning sign for Firstsource Solutions that deserve your attention before buying any shares.

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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.