Don't Ignore The Insider Selling In Hindustan Oil Exploration

We wouldn't blame Hindustan Oil Exploration Company Limited (NSE:HINDOILEXP) shareholders if they were a little worried about the fact that Ramasamy Jeevanandam, the MD & Executive Director recently netted about ₹184m selling shares at an average price of ₹230. That sale reduced their total holding by 16% which is hardly insignificant, but far from the worst we've seen.

Check out our latest analysis for Hindustan Oil Exploration

The Last 12 Months Of Insider Transactions At Hindustan Oil Exploration

In fact, the recent sale by Ramasamy Jeevanandam was the biggest sale of Hindustan Oil Exploration shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was slightly below the current price of ₹231, 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. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 16% of Ramasamy Jeevanandam's holding.

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 are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Insider Ownership Of Hindustan Oil Exploration

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 27% of Hindustan Oil Exploration shares, worth about ₹8.3b. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Hindustan Oil Exploration Tell Us?

An insider hasn't bought Hindustan Oil Exploration 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. 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. I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow for free.

But note: Hindustan Oil Exploration 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.