Stock Analysis

Need To Know: Ujjivan Financial Services Limited (NSE:UJJIVAN) Insiders Have Been Selling Shares

NSEI:UJJIVAN
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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Ujjivan Financial Services Limited (NSE:UJJIVAN).

What Is Insider Buying?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

See our latest analysis for Ujjivan Financial Services

The Last 12 Months Of Insider Transactions At Ujjivan Financial Services

In the last twelve months, the biggest single sale by an insider was when the Founder & Non-Executive Non-Independent Chairman, Samit Ghosh, sold ₹5.5m worth of shares at a price of ₹395 per share. 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 (₹224). So it may not shed much light on insider confidence at current levels.

In the last year Ujjivan Financial Services insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
NSEI:UJJIVAN Insider Trading Volume September 22nd 2020

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Does Ujjivan Financial Services 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. From our data, it seems that Ujjivan Financial Services insiders own 1.4% of the company, worth about ₹369m. However, it's possible that insiders might have an indirect interest through a more complex structure. Whilst better than nothing, we're not overly impressed by these holdings.

So What Does This Data Suggest About Ujjivan Financial Services Insiders?

The fact that there have been no Ujjivan Financial Services insider transactions recently certainly doesn't bother us. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Ujjivan Financial Services insiders selling. 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. Every company has risks, and we've spotted 1 warning sign for Ujjivan Financial Services you should know about.

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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