Don't Ignore The Insider Selling In Sarveshwar Foods

We wouldn't blame Sarveshwar Foods Limited (NSE:SARVESHWAR) shareholders if they were a little worried about the fact that Rohit Gupta, the Non-Executive Chairman recently netted about ₹123m selling shares at an average price of ₹11.07. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 0.2%.

See our latest analysis for Sarveshwar Foods

The Last 12 Months Of Insider Transactions At Sarveshwar Foods

In fact, the recent sale by Rohit Gupta was the biggest sale of Sarveshwar Foods shares made by an insider individual in the last twelve months, according to our records. 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 (₹9.72). So it is hard to draw any strong conclusion from it.

Rohit Gupta sold a total of 15.20m shares over the year at an average price of ₹10.80. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Does Sarveshwar Foods Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Sarveshwar Foods insiders own 66% of the company, currently worth about ₹6.3b based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Sarveshwar Foods Insiders?

An insider hasn't bought Sarveshwar Foods stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. On the plus side, Sarveshwar Foods makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Sarveshwar Foods.

But note: Sarveshwar Foods 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.