Reliance Chemotex Industries Insiders Forfeit On 21% Gains After Selling Stock

While Reliance Chemotex Industries Limited (NSE:RELCHEMQ) shareholders have had a good week with the stock up 21%, they shouldn't let their guards down. Even though stock prices were relatively low, insiders elected to sell ₹7.0m worth of stock in the last year, which could indicate some expected downturn.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Reliance Chemotex Industries

The Last 12 Months Of Insider Transactions At Reliance Chemotex Industries

In the last twelve months, the biggest single sale by an insider was when the insider, Madan Rathi, sold ₹7.0m worth of shares at a price of ₹298 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of ₹238. So it may not shed much light on insider confidence at current levels. Madan Rathi was the only individual insider to sell over the last year.

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!

I will like Reliance Chemotex Industries 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 Of Reliance Chemotex Industries

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data indicates that Reliance Chemotex Industries insiders own about ₹266m worth of shares (which is 15% of the company). However, it's possible that insiders might have an indirect interest through a more complex structure. Whilst better than nothing, we're not overly impressed by these holdings.

What Might The Insider Transactions At Reliance Chemotex Industries Tell Us?

It doesn't really mean much that no insider has traded Reliance Chemotex Industries shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Reliance Chemotex Industries insiders selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Reliance Chemotex Industries. For example, Reliance Chemotex Industries has 5 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.