Have Dr. Lal PathLabs Insiders Been Selling Stock?

Anyone interested in Dr. Lal PathLabs Limited (NSE:LALPATHLAB) should probably be aware that the MD & Director, Om Manchanda, recently divested ₹35m worth of shares in the company, at an average price of ₹3,057 each. On the bright side, that sale was only 1.3% of their holding, so we doubt it's very meaningful, on its own.

View our latest analysis for Dr. Lal PathLabs

The Last 12 Months Of Insider Transactions At Dr. Lal PathLabs

Over the last year, we can see that the biggest insider sale was by the Executive Chairman, Arvind Lal, for ₹681m worth of shares, at about ₹3,406 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (₹3,054). So it may not shed much light on insider confidence at current levels.

All up, insiders sold more shares in Dr. Lal PathLabs 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 want to know exactly who sold, for how much, and when, simply click on the graph below!

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Does Dr. Lal PathLabs 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Dr. Lal PathLabs insiders own 55% of the company, currently worth about ₹141b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Dr. Lal PathLabs Insiders?

Insiders sold Dr. Lal PathLabs shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. But since Dr. Lal PathLabs is profitable and growing, we're not too worried by this. 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. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 2 warning signs for Dr. Lal PathLabs and we suggest you have a look.

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 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.