CSL Finance Insiders Miss 11% Gain After Offloading Stock

Even though CSL Finance Limited (NSE:CSLFINANCE) stock gained 11% last week, insiders who sold ₹30m worth of stock over the past year are probably better off. Selling at an average price of ₹482, which is higher than the current price, may have been the wisest decision for these insiders as their investment would have been worth less now than when they sold.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At CSL Finance

In the last twelve months, the biggest single sale by an insider was when the insider, Sat Gupta, sold ₹30m worth of shares at a price of ₹482 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of ₹281. So it is hard to draw any strong conclusion from it. Sat Gupta was the only individual insider to sell shares in the last twelve months.

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!

Check out our latest analysis for CSL Finance

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Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. CSL Finance insiders own about ₹1.7b worth of shares. That equates to 26% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The CSL Finance Insider Transactions Indicate?

It doesn't really mean much that no insider has traded CSL Finance 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 CSL Finance 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 CSL Finance. When we did our research, we found 3 warning signs for CSL Finance (1 shouldn't be ignored!) that we believe deserve your full attention.

But note: CSL Finance 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.