Don't Ignore The Fact That This Insider Just Sold Some Shares In CRISIL Limited (NSE:CRISIL)

By
Simply Wall St
Published
June 10, 2021
NSEI:CRISIL

Anyone interested in CRISIL Limited (NSE:CRISIL) should probably be aware that a company insider, Rama Patel, recently divested ₹16m worth of shares in the company, at an average price of ₹1,960 each. Equally important, that sale actually reduced their holding by a full 64% which hardly makes us feel bullish about the stock.

See our latest analysis for CRISIL

The Last 12 Months Of Insider Transactions At CRISIL

Over the last year, we can see that the biggest insider sale was by the Chief Ratings Officer of CRISIL Ratings Limited, Subodh Rai, for ₹28m worth of shares, at about ₹1,950 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of ₹2,307. 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. 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 57% of Subodh Rai's holding.

In the last year CRISIL insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart 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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NSEI:CRISIL Insider Trading Volume June 11th 2021

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. CRISIL insiders own 6.5% of the company, currently worth about ₹11b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About CRISIL Insiders?

Insiders sold CRISIL shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing CRISIL. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of CRISIL.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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, but not derivative transactions.

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This article by Simply Wall St is general in nature. 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.
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