Need To Know: HDFC Standard Life Insurance Company Limited (NSE:HDFCLIFE) Insiders Have Been Selling Shares

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in HDFC Standard Life Insurance Company Limited (NSE:HDFCLIFE).

Do Insider Transactions Matter?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, most countries require that the company discloses such transactions to the market.

Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'

Check out our latest analysis for HDFC Standard Life Insurance

HDFC Standard Life Insurance Insider Transactions Over The Last Year

Chief Operating Officer Subrat Mohanty made the biggest insider sale in the last 12 months. That single transaction was for ₹276m worth of shares at a price of ₹395 each. So we know that an insider sold shares at around the present share price of ₹385. They could have a variety of motivations for selling, but it's still not particularly encouraging to see. Arguably, insider selling at around current prices should give us reason to reflect on whether the stock is fully valued at the moment.

Over the last year, we can see that insiders have bought 130.41k shares worth ₹35m. On the other hand they divested 6.93m shares, for ₹3.1b. In total, HDFC Standard Life Insurance insiders sold more than they bought over the last year. They sold for an average price of about ₹448. We don't gain confidence from insider selling below the recent share price. Since insiders sell for many reasons, we wouldn't put too much weight on it. The chart below shows insider transactions over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like HDFC Standard Life Insurance better if I see some big insider buys. While we wait, check out this freelist of growing companies with considerable, recent, insider buying.

HDFC Standard Life Insurance Insiders Are Selling The Stock

There was substantially more insider selling, than buying, of HDFC Standard Life Insurance shares over the last three months. We note insiders cashed in ₹989m worth of shares. Meanwhile insiders bought ₹5.0m worth. We don't view these transactions as a positive sign.

Insider Ownership of HDFC Standard Life Insurance

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Based on our data, HDFC Standard Life Insurance insiders have about 1.3% of the stock, worth approximately ₹143m. I generally like to see higher levels of ownership.

So What Does This Data Suggest About HDFC Standard Life Insurance Insiders?

The stark truth for HDFC Standard Life Insurance is that there has been more insider selling than insider buying in the last three months. Zooming out, the longer term picture doesn't give us much comfort. But since HDFC Standard Life Insurance is profitable and growing, we're not too worried by this. When you combine this with the relatively low insider ownership, we are very cautious about the stock. As the saying goes, only fools rush in. Of course, the future is what matters most. So if you are interested in HDFC Standard Life Insurance, you should check out this freereport on analyst forecasts for the company.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this freelist of interesting companies.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.

Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.