Don't Ignore The Insider Selling In Fusion Micro Finance

We note that the Fusion Micro Finance Limited (NSE:FUSION) CBO - MFI, Ankush Ahluwalia, recently sold ₹7.4m worth of stock for ₹502 per share. It wasn't a huge sale, but it did reduce their holding by 21%. This does not instill confidence.

View our latest analysis for Fusion Micro Finance

The Last 12 Months Of Insider Transactions At Fusion Micro Finance

Over the last year, we can see that the biggest insider sale was by the Chief Operating Officer of MFI, Tarun Mehndiratta, for ₹12m worth of shares, at about ₹590 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (₹465). So it may not tell us anything about how insiders feel about the current share price.

Happily, we note that in the last year insiders paid ₹22m for 39.40k shares. On the other hand they divested 167.27k shares, for ₹95m. All up, insiders sold more shares in Fusion Micro Finance than they bought, over the last year. 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

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Fusion Micro Finance insiders own about ₹2.7b worth of shares. That equates to 5.9% 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.

What Might The Insider Transactions At Fusion Micro Finance Tell Us?

Insiders haven't bought Fusion Micro Finance stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. But it is good to see that Fusion Micro Finance is growing earnings. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. While it's good to be aware of 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. Every company has risks, and we've spotted 3 warning signs for Fusion Micro Finance (of which 2 are significant!) you should know about.

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 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com