Multiple insiders sold Godrej Consumer Products Limited (NSE:GODREJCP) stock in the last year, which isn't a good sign for investors

A number of Godrej Consumer Products Limited (NSE:GODREJCP) insiders sold their shares in the last year, which may have raised concerns among investors. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Godrej Consumer Products

Godrej Consumer Products Insider Transactions Over The Last Year

The insider, Akhil Chandra, made the biggest insider sale in the last 12 months. That single transaction was for ₹17m worth of shares at a price of ₹870 each. So it's clear an insider wanted to take some cash off the table, even below the current price of ₹959. 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. This single sale was 100% of Akhil Chandra's stake.

In the last twelve months insiders purchased 16.00k shares for ₹12m. But insiders sold 30.74k shares worth ₹25m. All up, insiders sold more shares in Godrej Consumer Products 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!

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

Insider Ownership Of Godrej Consumer Products

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Godrej Consumer Products insiders own 1.9% of the company, currently worth about ₹19b 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.

What Might The Insider Transactions At Godrej Consumer Products Tell Us?

The fact that there have been no Godrej Consumer Products 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 Godrej Consumer Products insider transactions don't fill us with confidence. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

Of course Godrej Consumer Products 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, but not derivative transactions.

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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.