Globus Spirits Insider Stock Sales Prove Timely As Market Valuation Descends To ₹27b

Insiders seem to have made the most of their holdings by selling ₹13m worth of Globus Spirits Limited (NSE:GLOBUSSPR) stock at an average sell price of ₹818 during the past year. The company’s market cap plunged by ₹3.5b after price dropped by 11% last week but insiders were able to limit their loss to an extent.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Globus Spirits

The Last 12 Months Of Insider Transactions At Globus Spirits

The Chief Executive Officer of Consumer Division, Paramjit Gill, made the biggest insider sale in the last 12 months. That single transaction was for ₹7.1m worth of shares at a price of ₹799 each. That means that an insider was selling shares at slightly below the current price (₹937). 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 17% of Paramjit Gill's holding.

All up, insiders sold more shares in Globus Spirits than they bought, over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Globus Spirits Insiders Are Selling The Stock

The last three months saw some Globus Spirits insider selling. insider Pankaj Tyagi divested only ₹1.1m worth of shares in that time. It's not great to see insider selling, nor the lack of recent buyers. But the volume sold is so low that it really doesn't bother us.

Insider Ownership Of Globus Spirits

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data suggests Globus Spirits insiders own 0.4% of the company, worth about ₹120m. But they may have an indirect interest through a corporate structure that we haven't picked up on. We consider this fairly low insider ownership.

What Might The Insider Transactions At Globus Spirits Tell Us?

An insider sold Globus Spirits shares recently, but they didn't buy any. Despite some insider buying, the longer term picture doesn't make us feel much more positive. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Globus Spirits is showing 3 warning signs in our investment analysis, and 1 of those is a bit unpleasant...

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.