Huhtamaki India Limited (NSE:HUHTAMAKI) insiders who sold ₹63m worth of stock earlier this year are probably glad they did so as market cap slides to ₹21b

By
Simply Wall St
Published
August 11, 2021
NSEI:HUHTAMAKI
Source: Shutterstock

By selling ₹63m worth of Huhtamaki India Limited (NSE:HUHTAMAKI) stock at an average sell price of ₹313 over the last year, insiders seemed to have made the most of their holdings. The company’s market cap plunged by ₹2.7b after price dropped by 12% last week but insiders were able to limit their loss to an extent.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Huhtamaki India

Huhtamaki India Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Amar Chhajed, for ₹63m worth of shares, at about ₹313 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of ₹275. So it is hard to draw any strong conclusion from it. The only individual insider seller over the last year was Amar Chhajed.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
NSEI:HUHTAMAKI Insider Trading Volume August 12th 2021

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Does Huhtamaki India 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. Huhtamaki India insiders own about ₹961m worth of shares. That equates to 4.6% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Huhtamaki India Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Huhtamaki India insider transactions don't fill us with confidence. 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 1 warning sign that you should run your eye over to get a better picture of Huhtamaki India.

Of course Huhtamaki India 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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