Insiders At Bajaj Finserv Sold ₹1.1b In Stock, Alluding To Potential Weakness

The fact that multiple Bajaj Finserv Ltd. (NSE:BAJAJFINSV) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

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.

See our latest analysis for Bajaj Finserv

The Last 12 Months Of Insider Transactions At Bajaj Finserv

In the last twelve months, the biggest single sale by an insider was when the Non-Executive Director, Rajivnayan Bajaj, sold ₹604m worth of shares at a price of ₹1,388 per share. That means that an insider was selling shares at slightly below the current price (₹1,540). 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. It is worth noting that this sale was only 42% of Rajivnayan Bajaj's holding.

In the last twelve months insiders purchased 577.62k shares for ₹888m. But insiders sold 794.88k shares worth ₹1.1b. Over the last year we saw more insider selling of Bajaj Finserv shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Bajaj Finserv Insiders Are Selling The Stock

The last three months saw significant insider selling at Bajaj Finserv. Specifically, insider Rahul Kumar Bajaj ditched ₹79m 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.

Insider Ownership Of Bajaj Finserv

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Bajaj Finserv insiders own 3.4% of the company, worth about ₹83b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Bajaj Finserv Tell Us?

An insider sold stock recently, but they haven't been buying. Zooming out, the longer term picture doesn't give us much comfort. On the plus side, Bajaj Finserv makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. You'd be interested to know, that we found 1 warning sign for Bajaj Finserv and we suggest you have a look.

But note: Bajaj Finserv 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.