Should You Review Recent Insider Transactions At IIFL Securities Limited (NSE:IIFLSEC)?

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in IIFL Securities Limited (NSE:IIFLSEC).

What Is Insider Selling?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.

Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

View our latest analysis for IIFL Securities

The Last 12 Months Of Insider Transactions At IIFL Securities

Over the last year, we can see that the biggest insider sale was by the insider, Prabodh Agrawal, for ₹14m worth of shares, at about ₹58.22 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of ₹43.10. So it may not tell us anything about how insiders feel about the current share price.

Over the last year, we can see that insiders have bought 115.00k shares worth ₹3.2m. On the other hand they divested 297.93k shares, for ₹16m. In total, IIFL Securities insiders sold more than they bought over the last year. 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!

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

Insider Ownership of IIFL Securities

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. It appears that IIFL Securities insiders own 33% of the company, worth about ₹4.6b. 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 IIFL Securities Tell Us?

It doesn't really mean much that no insider has traded IIFL Securities shares in the last quarter. While we feel good about high insider ownership of IIFL Securities, we can't say the same about the selling of shares. 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. While conducting our analysis, we found that IIFL Securities has 1 warning sign and it would be unwise to ignore it.

But note: IIFL Securities 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.

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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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