Have Insiders Sold HDFC Asset Management Company Limited (NSE:HDFCAMC) Shares Recently?

By
Simply Wall St
Published
July 24, 2021
NSEI:HDFCAMC
Source: Shutterstock

We wouldn't blame HDFC Asset Management Company Limited (NSE:HDFCAMC) shareholders if they were a little worried about the fact that Prashant Jain, the Chief Investment Officer recently netted about ₹78m selling shares at an average price of ₹2,893. However, that sale only accounted for 9.6% of their holding, so arguably it doesn't say much about their conviction.

See our latest analysis for HDFC Asset Management

HDFC Asset Management Insider Transactions Over The Last Year

In fact, the recent sale by Chief Investment Officer Prashant Jain was not their only sale of HDFC Asset Management shares this year. Earlier in the year, they fetched ₹2,880 per share in a -₹360m sale. That means that an insider was selling shares at below the current price (₹2,900). 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 21% of Prashant Jain's stake.

HDFC Asset Management insiders didn't buy any shares over the last year. 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!

insider-trading-volume
NSEI:HDFCAMC Insider Trading Volume July 25th 2021

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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. HDFC Asset Management insiders own 2.4% of the company, currently worth about ₹15b based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About HDFC Asset Management Insiders?

Insiders sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. But since HDFC Asset Management is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. 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 example - HDFC Asset Management has 2 warning signs we think you should be aware of.

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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