Trade Alert: The Non-Executive Non-Independent Director Of MITCON Consultancy & Engineering Services Limited (NSE:MITCON), Ajay Agarwal, Has Just Spent ₹2.8m Buying 18% More Shares

By
Simply Wall St
Published
July 24, 2021
NSEI:MITCON
Source: Shutterstock

Whilst it may not be a huge deal, we thought it was good to see that the MITCON Consultancy & Engineering Services Limited (NSE:MITCON) Non-Executive Non-Independent Director, Ajay Agarwal, recently bought ₹2.8m worth of stock, for ₹45.38 per share. That purchase might not be huge but it did increase their holding by 18%.

Check out our latest analysis for MITCON Consultancy & Engineering Services

The Last 12 Months Of Insider Transactions At MITCON Consultancy & Engineering Services

Over the last year, we can see that the biggest insider sale was by the Director, Pradeep Bavadekar, for ₹10m worth of shares, at about ₹40.85 per share. That means that an insider was selling shares at slightly below the current price (₹45.65). 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. This single sale was just 48% of Pradeep Bavadekar's stake. Pradeep Bavadekar was the only individual insider to sell over the last year.

In the last twelve months insiders purchased 110.00k shares for ₹2.8m. But insiders sold 250.00k shares worth ₹10m. 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!

insider-trading-volume
NSEI:MITCON Insider Trading Volume July 25th 2021

I will like MITCON Consultancy & Engineering Services better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. MITCON Consultancy & Engineering Services insiders own about ₹109m worth of shares. That equates to 18% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The MITCON Consultancy & Engineering Services Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. On the other hand the transaction history, over the last year, isn't so positive. Overall, we'd prefer see a more sustained buying from directors, but with a significant insider holding and more recent purchases, MITCON Consultancy & Engineering Services insiders are reasonably well aligned, and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For instance, we've identified 6 warning signs for MITCON Consultancy & Engineering Services (4 are concerning) you should be aware of.

Of course MITCON Consultancy & Engineering Services 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, but not derivative transactions.

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This article by Simply Wall St is general in nature. 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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