Have Insiders Sold Cholamandalam Investment and Finance Company Limited (NSE:CHOLAFIN) Shares Recently?

Anyone interested in Cholamandalam Investment and Finance Company Limited (NSE:CHOLAFIN) should probably be aware that a company insider, Ravi Kumar, recently divested ₹10m worth of shares in the company, at an average price of ₹536 each. Equally important, that sale actually reduced their holding by a full 81% which hardly makes us feel bullish about the stock.

View our latest analysis for Cholamandalam Investment and Finance

The Last 12 Months Of Insider Transactions At Cholamandalam Investment and Finance

In the last twelve months, the biggest single sale by an insider was when the Vice President of Human Resources, R. Chandrasekar, sold ₹13m worth of shares at a price of ₹388 per share. That means that even when the share price was below the current price of ₹539, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was 100% of R. Chandrasekar's holding.

In the last twelve months insiders purchased 44.88k shares for ₹7.8m. But insiders sold 215.46k shares worth ₹81m. In total, Cholamandalam Investment and Finance insiders sold more than they bought over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Cholamandalam Investment and Finance 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

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Cholamandalam Investment and Finance insiders own about ₹5.8b worth of shares. That equates to 1.3% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Cholamandalam Investment and Finance Tell Us?

Insiders sold stock recently, but they haven't been buying. Despite some insider buying, the longer term picture doesn't make us feel much more positive. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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. For instance, we've identified 4 warning signs for Cholamandalam Investment and Finance (1 is concerning) you should be aware of.

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, but not derivative transactions.

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