Insiders Could Have Profited By Holding onto MOS Utility Shares Despite 10% Drop

Despite the fact that MOS Utility Limited's (NSE:MOS) value has dropped 10% in the last week insiders who sold ₹1.2b worth of stock in the past 12 months have had less success. Given that the average selling price of ₹347 is still lower than the current share price, insiders would probably have been better off keeping their shares.

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.

Check out our latest analysis for MOS Utility

The Last 12 Months Of Insider Transactions At MOS Utility

In fact, the recent sale by insider Kurjibhai Rupareliya was not their only sale of MOS Utility shares this year. Earlier in the year, they fetched ₹370 per share in a -₹1.1b sale. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (₹270). So it may not shed much light on insider confidence at current levels.

Kurjibhai Rupareliya sold a total of 3.37m shares over the year at an average price of ₹347. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

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MOS Utility Insiders Are Selling The Stock

The last three months saw significant insider selling at MOS Utility. Specifically, insider Kurjibhai Rupareliya ditched ₹1.2b worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership Of MOS Utility

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's great to see that MOS Utility insiders own 48% of the company, worth about ₹3.2b. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The MOS Utility Insider Transactions Indicate?

An insider hasn't bought MOS Utility 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. But it is good to see that MOS Utility is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing MOS Utility. At Simply Wall St, we've found that MOS Utility has 4 warning signs (2 are a bit unpleasant!) that deserve your attention before going any further with your analysis.

But note: MOS Utility 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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.