Selling ₹149m Of Stock Was Lucrative Decision For Arihant Capital Markets Insiders

While Arihant Capital Markets Limited (NSE:ARIHANTCAP) shareholders have enjoyed a good week with stock up 13%, they need remain vigilant. In spite of the relatively cheap prices, insiders made the decision to sell ₹149m worth of stock in the last 12 months. This could be a warning indicator of vulnerabilities in the future.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Arihant Capital Markets

The Last 12 Months Of Insider Transactions At Arihant Capital Markets

Over the last year, we can see that the biggest insider sale was by the Chairman, Ashok Jain, for ₹72m worth of shares, at about ₹69.98 per share. That means that even when the share price was below the current price of ₹88.76, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 3.0% of Ashok Jain's holding.

In the last year Arihant Capital Markets insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

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. Arihant Capital Markets insiders own 75% of the company, currently worth about ₹6.9b 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 Arihant Capital Markets Insiders?

It doesn't really mean much that no insider has traded Arihant Capital Markets shares in the last quarter. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Arihant Capital Markets insider transactions don't fill us with confidence. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Arihant Capital Markets. You'd be interested to know, that we found 2 warning signs for Arihant Capital Markets and we suggest you have a look.

But note: Arihant Capital Markets 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.