Don't Ignore The Fact That This Insider Just Sold Some Shares In JM Financial Limited (NSE:JMFINANCIL)

Investors may wish to note that an insider of JM Financial Limited, Dimplekumar Shah, recently netted ₹4.6m from selling stock, receiving an average price of ₹91.91. It wasn't a huge sale, but it did reduce their holding by 26%. This does not instill confidence.

See our latest analysis for JM Financial

The Last 12 Months Of Insider Transactions At JM Financial

The MD & Co-CEO of Investment Banking Business, Atul Mehra, made the biggest insider sale in the last 12 months. That single transaction was for ₹13m worth of shares at a price of ₹73.81 each. So it's clear an insider wanted to take some cash off the table, even below the current price of ₹91.75. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 19% of Atul Mehra's holding.

JM Financial 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. By clicking on the graph below, you can see the precise details of each insider transaction!

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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. JM Financial insiders own about ₹19b worth of shares (which is 22% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At JM Financial Tell Us?

Insiders haven't bought JM Financial stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. 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 instance, we've identified 3 warning signs for JM Financial (1 is potentially serious) you should be aware of.

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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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