SMC Global Securities Insiders Benefitted From Selling Stock At ₹122

Last week, SMC Global Securities Limited's (NSE:SMCGLOBAL) stock jumped 11%, but insiders who sold ₹5.5m worth of stock in over the past year are likely to be in a better position. Selling at an average price of ₹122, which is higher than the current price, may have been the best move for these insiders because their investment would have been worth less now than when they sold.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for SMC Global Securities

SMC Global Securities Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Shalie Gupta, sold ₹5.5m worth of shares at a price of ₹122 per share. That means that even when the share price was below the current price of ₹143, an insider wanted to cash in some shares. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was 100% of Shalie Gupta's stake. The only individual insider seller over the last year was Shalie Gupta.

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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

SMC Global Securities Insiders Are Selling The Stock

The last quarter saw substantial insider selling of SMC Global Securities shares. In total, insider Shalie Gupta dumped ₹5.5m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership Of SMC Global 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. SMC Global Securities insiders own 41% of the company, currently worth about ₹6.1b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At SMC Global Securities Tell Us?

An insider hasn't bought SMC Global Securities 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 since SMC Global Securities is profitable and growing, we're not too worried by this. 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. 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. Case in point: We've spotted 2 warning signs for SMC Global Securities you should be aware of.

But note: SMC Global 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 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.