Don't Ignore The Fact That This Insider Just Sold Some Shares In IIFL Wealth Management Limited (NSE:IIFLWAM)

We'd be surprised if IIFL Wealth Management Limited (NSE:IIFLWAM) shareholders haven't noticed that an insider, Himanshu Jain, recently sold ₹15m worth of stock at ₹979 per share. The eyebrow raising move amounted to a reduction of 32% in their holding.

Check out our latest analysis for IIFL Wealth Management

IIFL Wealth Management Insider Transactions Over The Last Year

The Non-Executive Director & Promoter, Nirmal Jain, made the biggest insider sale in the last 12 months. That single transaction was for ₹580m worth of shares at a price of ₹1,450 each. 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 ₹982. So it may not tell us anything about how insiders feel about the current share price.

In the last year IIFL Wealth Management insiders didn't buy any company stock. 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!

I will like IIFL Wealth Management better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider 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. 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's great to see that IIFL Wealth Management insiders own 23% of the company, worth about ₹20b. 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 IIFL Wealth Management Insiders?

Insiders haven't bought IIFL Wealth Management stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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. At Simply Wall St, we've found that IIFL Wealth Management has 4 warning signs (1 can't be ignored!) that deserve your attention before going any further with your analysis.

Of course IIFL Wealth Management 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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