Insiders Find Solace Selling ₹205m In Stock With Lotus Eye Hospital and Institute's Price Down 10%

Insiders seem to have made the most of their holdings by selling ₹205m worth of Lotus Eye Hospital and Institute Limited (NSE:LOTUSEYE) stock at an average sell price of ₹56.75 during the past year. The company's market worth decreased by ₹183m over the past week after the stock price dropped 10%, although insiders were able to minimize their losses

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Lotus Eye Hospital and Institute

Lotus Eye Hospital and Institute Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Vice President of Administration, Rajkumar Sundaramoorthy, sold ₹173m worth of shares at a price of ₹54.87 per share. That means that an insider was selling shares at slightly below the current price (₹77.49). 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. We note that the biggest single sale was 92% of Rajkumar Sundaramoorthy's holding. Rajkumar Sundaramoorthy was the only individual insider to sell over the last year.

Rajkumar Sundaramoorthy divested 3.61m shares over the last 12 months at an average price of ₹56.75. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership Of Lotus Eye Hospital and Institute

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. Lotus Eye Hospital and Institute insiders own 52% of the company, currently worth about ₹837m 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.

What Might The Insider Transactions At Lotus Eye Hospital and Institute Tell Us?

The fact that there have been no Lotus Eye Hospital and Institute insider transactions recently certainly doesn't bother us. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Lotus Eye Hospital and Institute insider transactions don't fill us with confidence. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 3 warning signs for Lotus Eye Hospital and Institute you should be aware of.

Of course Lotus Eye Hospital and Institute may not be the best stock to buy. So you may wish to see this free collection of high quality 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.