This Insider Has Just Sold Shares In Avenue Supermarts

We wouldn't blame Avenue Supermarts Limited (NSE:DMART) shareholders if they were a little worried about the fact that Ramakant Baheti, the Group CFO & Whole-Time Director recently netted about ₹158m selling shares at an average price of ₹4,730. However, that sale only accounted for 1.3% of their holding, so arguably it doesn't say much about their conviction.

Check out our latest analysis for Avenue Supermarts

The Last 12 Months Of Insider Transactions At Avenue Supermarts

Notably, that recent sale by Ramakant Baheti is the biggest insider sale of Avenue Supermarts shares that we've seen in the last year. That means that an insider was selling shares at slightly below the current price (₹4,862). 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 1.3% of Ramakant Baheti's stake.

In the last twelve months insiders purchased 900.00 shares for ₹4.2m. But insiders sold 574.54k shares worth ₹2.4b. Over the last year we saw more insider selling of Avenue Supermarts shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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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. Avenue Supermarts insiders own about ₹2.0t worth of shares (which is 64% of the company). 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 Do The Avenue Supermarts Insider Transactions Indicate?

Unfortunately, there has been more insider selling of Avenue Supermarts stock, than buying, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. But since Avenue Supermarts is profitable and growing, we're not too worried by this. 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. You'd be interested to know, that we found 1 warning sign for Avenue Supermarts and we suggest you have a look.

But note: Avenue Supermarts 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 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com