This Insider Has Just Sold Shares In Le Merite Exports

Anyone interested in Le Merite Exports Limited (NSE:LEMERITE) should probably be aware that the Executive Director, Sweta Lath, recently divested ₹37m worth of shares in the company, at an average price of ₹226 each. The eyebrow raising move amounted to a reduction of 10% in their holding.

Check out our latest analysis for Le Merite Exports

The Last 12 Months Of Insider Transactions At Le Merite Exports

Notably, that recent sale by Sweta Lath is the biggest insider sale of Le Merite Exports shares that we've seen in the last year. That means that an insider was selling shares at below the current price (₹230). 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. We note that the biggest single sale was only 10% of Sweta Lath's holding.

In total, Le Merite Exports insiders sold more than they bought over the last year. The sellers received a price of around ₹225, on average. We don't gain confidence from insider selling below the recent share price. Since insiders sell for many reasons, we wouldn't put too much weight on it. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership Of Le Merite Exports

For a common shareholder, it is worth checking how many shares are held by company 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. Le Merite Exports insiders own 73% of the company, currently worth about ₹3.9b based on the recent share price. 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 Does This Data Suggest About Le Merite Exports Insiders?

The stark truth for Le Merite Exports is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. On the plus side, Le Merite Exports makes money, and is growing profits. 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. Be aware that Le Merite Exports is showing 4 warning signs in our investment analysis, and 2 of those shouldn't be ignored...

Of course Le Merite Exports 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.