Avenue Supermarts Insiders Sold ₹2.7b Of Shares Suggesting Hesitancy

In the last year, many Avenue Supermarts Limited (NSE:DMART) 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 we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Avenue Supermarts

Avenue Supermarts Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Group CFO & Whole-Time Director, Ramakant Baheti, sold ₹158m worth of shares at a price of ₹4,730 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is ₹3,931. So it is hard to draw any strong conclusion from it.

Happily, we note that in the last year insiders paid ₹4.2m for 900.00 shares. On the other hand they divested 595.97k shares, for ₹2.7b. In total, Avenue Supermarts insiders sold more than they bought over the last year. 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!

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Insiders At Avenue Supermarts Have Sold Stock Recently

Over the last three months, we've seen significant insider selling at Avenue Supermarts. In total, insiders sold ₹704m 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 Avenue Supermarts Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Avenue Supermarts insiders own about ₹1.6t worth of shares (which is 64% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Avenue Supermarts Tell Us?

Insiders haven't bought Avenue Supermarts stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. But it is good to see that Avenue Supermarts is growing earnings. 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. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Avenue Supermarts. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Avenue Supermarts.

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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.