Stock Analysis

Bajaj Electricals Limited (NSE:BAJAJELEC) insiders who sold ₹543m worth of stock earlier this year are probably glad they did so as market cap slides to ₹121b

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Over the past year, insiders sold ₹543m worth of Bajaj Electricals Limited (NSE:BAJAJELEC) stock at an average price of ₹1,106 per share allowing them to get the most out of their money. After the stock price dropped 3.5% last week, the company's market value declined by ₹4.4b, but insiders were able to mitigate their losses.

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.

See our latest analysis for Bajaj Electricals

The Last 12 Months Of Insider Transactions At Bajaj Electricals

Over the last year, we can see that the biggest insider sale was by the Non-Executive Non-Independent Director, Pooja Bajaj, for ₹493m worth of shares, at about ₹1,100 per share. So what is clear is that an insider saw fit to sell at around the current price of ₹1,057. 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 Bajaj Electricals insiders didn't buy any company stock. 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!

NSEI:BAJAJELEC Insider Trading Volume March 15th 2023

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).

Bajaj Electricals Insiders Are Selling The Stock

The last three months saw significant insider selling at Bajaj Electricals. In total, insiders dumped ₹16m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Does Bajaj Electricals Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Bajaj Electricals insiders own 19% of the company, currently worth about ₹23b based on the recent share price. 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 Bajaj Electricals Insiders?

Insiders sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. But it is good to see that Bajaj Electricals is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Bajaj Electricals. Every company has risks, and we've spotted 1 warning sign for Bajaj Electricals you should know about.

But note: Bajaj Electricals may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.

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