This Insider Has Just Sold Shares In Dr. Lal PathLabs

We'd be surprised if Dr. Lal PathLabs Limited (NSE:LALPATHLAB) shareholders haven't noticed that the MD & Director, Om Manchanda, recently sold ₹28m worth of stock at ₹3,262 per share. However, the silver lining is that the sale only reduced their total holding by 0.9%, so we're hesitant to read anything much into it, on its own.

See our latest analysis for Dr. Lal PathLabs

Dr. Lal PathLabs Insider Transactions Over The Last Year

The Executive Chairman, Arvind Lal, made the biggest insider sale in the last 12 months. That single transaction was for ₹437m worth of shares at a price of ₹2,300 each. So it's clear an insider wanted to take some cash off the table, even below the current price of ₹3,341. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 0.7% of Arvind Lal's holding.

Dr. Lal PathLabs insiders didn't buy any shares 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?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Dr. Lal PathLabs insiders own 56% of the company, worth about ₹155b. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

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

Insiders sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. On the plus side, Dr. Lal PathLabs makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Dr. Lal PathLabs. While conducting our analysis, we found that Dr. Lal PathLabs has 2 warning signs and it would be unwise to ignore them.

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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.