Stock Analysis

With HDFC Asset Management Company Limited's (NSE:HDFCAMC)) price down 4.5% this week, insiders might find some solace having sold ₹107m worth of shares earlier this year.

  •  Updated
Source: Shutterstock

Insiders seem to have made the most of their holdings by selling ₹107m worth of HDFC Asset Management Company Limited (NSE:HDFCAMC) stock at an average sell price of ₹2,072 during the past year. After the stock price dropped 4.5% last week, the company's market value declined by ₹18b, but insiders were able to mitigate their losses.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for HDFC Asset Management

The Last 12 Months Of Insider Transactions At HDFC Asset Management

In the last twelve months, the biggest single sale by an insider was when the insider, Anil Bamboli, sold ₹29m worth of shares at a price of ₹2,175 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. It's of some comfort that this sale was conducted at a price well above the current share price, which is ₹1,848. So it may not tell us anything about how insiders feel about the current share price.

Insiders in HDFC Asset Management didn't buy any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

NSEI:HDFCAMC Insider Trading Volume February 3rd 2023

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

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that HDFC Asset Management insiders own 1.4% of the company, worth about ₹5.6b. 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 HDFC Asset Management Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the HDFC Asset Management insiders selling. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of HDFC Asset Management.

But note: HDFC Asset Management 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, but not derivative transactions.

Valuation is complex, but we're helping make it simple.

Find out whether HDFC Asset Management is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis