This Insider Has Just Sold Shares In Sundaram Finance Limited (NSE:SUNDARMFIN)

Anyone interested in Sundaram Finance Limited (NSE:SUNDARMFIN) should probably be aware that a company insider, Lily Vijayaraghavan, recently divested ₹25m worth of shares in the company, at an average price of ₹1,685 each. However, the silver lining is that the sale only reduced their total holding by 1.5%, so we're hesitant to read anything much into it, on its own.

See our latest analysis for Sundaram Finance

Sundaram Finance Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, N. Krishnan, sold ₹29m worth of shares at a price of ₹1,632 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of ₹1,774. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower 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. It is worth noting that this sale was only 8.4% of N. Krishnan's holding.

Over the last year we saw more insider selling of Sundaram Finance shares, than buying. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Sundaram Finance insiders own 28% of the company, worth about ₹57b. 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 Sundaram Finance Insider Transactions Indicate?

An insider sold Sundaram Finance shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. It is good to see high insider ownership, but the insider selling leaves us cautious. 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 4 warning signs for Sundaram Finance (1 shouldn't be ignored) you should be aware of.

Of course Sundaram Finance 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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