Insiders who sold Aarti Industries Limited's (NSE:AARTIIND) earlier this year didn't have to weather this week's 6.2% slide

Despite the fact that Aarti Industries Limited's (NSE:AARTIIND) value has dropped 6.2% in the last week insiders who sold ₹1.8b worth of stock in the past 12 months have had less success. Insiders might have been better off holding onto their shares, given that the average selling price of ₹770 is still below the current share price.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Aarti Industries

Aarti Industries Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Jaya Gogri, for ₹805m worth of shares, at about ₹894 per share. That means that an insider was selling shares at slightly below the current price (₹927). 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. It is worth noting that this sale was only 8.3% of Jaya Gogri's holding.

Insiders in Aarti Industries didn't buy any shares in the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Aarti Industries better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Does Aarti Industries Boast High Insider Ownership?

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. It's great to see that Aarti Industries insiders own 29% of the company, worth about ₹99b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Aarti Industries Insider Transactions Indicate?

The fact that there have been no Aarti Industries 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 Aarti Industries 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. To help with this, we've discovered 3 warning signs (1 is potentially serious!) that you ought to be aware of before buying any shares in Aarti Industries.

Of course Aarti Industries 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.