Don't Ignore The Insider Selling In Advanced Enzyme Technologies

Investors may wish to note that an insider of Advanced Enzyme Technologies Limited, Chandrakanth Kumar Rathi, recently netted ₹6.9m from selling stock, receiving an average price of ₹396. It might not be a huge sale, but it did reduce their holding size 38%, hardly encouraging.

View our latest analysis for Advanced Enzyme Technologies

The Last 12 Months Of Insider Transactions At Advanced Enzyme Technologies

The insider, Ashish Pujara, made the biggest insider sale in the last 12 months. That single transaction was for ₹8.9m worth of shares at a price of ₹318 each. That means that even when the share price was below the current price of ₹391, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was 93% of Ashish Pujara's holding.

In the last twelve months insiders purchased 21.90k shares for ₹6.4m. On the other hand they divested 46.67k shares, for ₹16m. All up, insiders sold more shares in Advanced Enzyme Technologies than they bought, over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Advanced Enzyme Technologies better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Does Advanced Enzyme Technologies Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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. Advanced Enzyme Technologies insiders own about ₹20b worth of shares (which is 47% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Advanced Enzyme Technologies Insiders?

An insider hasn't bought Advanced Enzyme Technologies stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. But since Advanced Enzyme Technologies is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Advanced Enzyme Technologies.

But note: Advanced Enzyme Technologies 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 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.

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