Spandana Sphoorty Financial Limited's (NSE:SPANDANA)) market cap declines to ₹31b but insiders who sold ₹168m stock were able to hedge their losses

By
Simply Wall St
Published
November 17, 2021
NSEI:SPANDANA
Source: Shutterstock

Insiders seem to have made the most of their holdings by selling ₹168m worth of Spandana Sphoorty Financial Limited (NSE:SPANDANA) stock at an average sell price of ₹708 during the past year. After the stock price dropped 12% last week, the company's market value declined by ₹4.4b, but insiders were able to mitigate their losses.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Spandana Sphoorty Financial

Spandana Sphoorty Financial Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Vijaya Siva Rami Vendidandi, for ₹131m worth of shares, at about ₹728 per share. 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 ₹482. So it may not tell us anything about how insiders feel about the current share price.

All up, insiders sold more shares in Spandana Sphoorty Financial than they bought, over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NSEI:SPANDANA Insider Trading Volume November 18th 2021

I will like Spandana Sphoorty Financial 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

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 17% of Spandana Sphoorty Financial shares, worth about ₹5.2b. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Spandana Sphoorty Financial Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Spandana Sphoorty Financial insiders selling. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To that end, you should learn about the 3 warning signs we've spotted with Spandana Sphoorty Financial (including 1 which is concerning).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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