This Insider Has Just Sold Shares In HDFC Life Insurance Company Limited (NSE:HDFCLIFE)

We'd be surprised if HDFC Life Insurance Company Limited (NSE:HDFCLIFE) shareholders haven't noticed that the MD, CEO & Director, Vibha Padalkar, recently sold ₹31m worth of stock at ₹741 per share. On the bright side, that sale was only 3.0% of their holding, so we doubt it's very meaningful, on its own.

View our latest analysis for HDFC Life Insurance

The Last 12 Months Of Insider Transactions At HDFC Life Insurance

Notably, that recent sale by MD, CEO & Director Vibha Padalkar was not the only time they sold HDFC Life Insurance shares this year. They previously made an even bigger sale of -₹109m worth of shares at a price of ₹621 per share. That means that an insider was selling shares at slightly below the current price (₹711). 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 11%of Vibha Padalkar's holding.

In the last year HDFC Life Insurance insiders didn't buy any company stock. 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!

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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. We usually like to see fairly high levels of insider ownership. It appears that HDFC Life Insurance insiders own 0.4% of the company, worth about ₹5.6b. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

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

Insiders sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. On the plus side, HDFC Life Insurance makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that HDFC Life Insurance has 1 warning sign and it would be unwise to ignore it.

But note: HDFC Life Insurance may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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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