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 ₹13m worth of shares in the company, at an average price of ₹2,652 each. On the bright side, that sale was only 0.5% of their holding, so we doubt it's very meaningful, on its own.

See our latest analysis for Sundaram Finance

The Last 12 Months Of Insider Transactions At Sundaram Finance

In fact, the recent sale by insider Lily Vijayaraghavan was not their only sale of Sundaram Finance shares this year. They previously made an even bigger sale of -₹25m worth of shares at a price of ₹1,685 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of ₹2,569. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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. We note that the biggest single sale was only 2.4%of Lily Vijayaraghavan's holding.

In total, Sundaram Finance insiders sold more than they bought over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. 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.

Does Sundaram Finance Boast High 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Sundaram Finance insiders own about ₹78b worth of shares (which is 26% of the company). 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 Sundaram Finance Tell Us?

The insider sales have outweighed the insider buying, at Sundaram Finance, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. 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 example, Sundaram Finance has 4 warning signs (and 1 which is potentially serious) we think you should know about.

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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