Equitas Holdings Limited (NSE:EQUITAS) Insiders Have Been Selling

We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in Equitas Holdings Limited (NSE:EQUITAS).

Do Insider Transactions Matter?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

See our latest analysis for Equitas Holdings

The Last 12 Months Of Insider Transactions At Equitas Holdings

In the last twelve months, the biggest single sale by an insider was when the Chief Executive Officer of Equitas Micro Finance Limited, H. K. Raghavan, sold ₹12m worth of shares at a price of ₹98.26 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is ₹52.75. So it may not tell us anything about how insiders feel about the current share price. The only individual insider seller over the last year was H. K. Raghavan.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, 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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Insider Ownership of Equitas Holdings

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Equitas Holdings insiders own 6.5% of the company, worth about ₹1.2b. 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 Equitas Holdings Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Equitas Holdings shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Equitas Holdings insiders selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Equitas Holdings. For example, Equitas Holdings has 2 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

Of course Equitas Holdings may not be the best stock to buy. So you may wish to see this free collection of high quality 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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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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