This Insider Has Just Sold Shares In Sudarshan Chemical Industries

Some Sudarshan Chemical Industries Limited (NSE:SUDARSCHEM) shareholders may be a little concerned to see that insider Ajoy Rathi recently sold a substantial ₹1.4b worth of stock at a price of ₹768 per share. That diminished their holding by a very significant 61%, which arguably implies a strong desire to reallocate capital.

See our latest analysis for Sudarshan Chemical Industries

The Last 12 Months Of Insider Transactions At Sudarshan Chemical Industries

Notably, that recent sale by Ajoy Rathi is the biggest insider sale of Sudarshan Chemical Industries shares that we've seen in the last year. That means that an insider was selling shares at slightly below the current price (₹829). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was 61% of Ajoy Rathi's holding.

Sudarshan Chemical Industries insiders didn't buy any shares over the last year. 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Does Sudarshan Chemical 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 Sudarshan Chemical Industries insiders own 45% of the company, worth about ₹25b. 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 Sudarshan Chemical Industries Insiders?

An insider sold Sudarshan Chemical Industries shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. On the plus side, Sudarshan Chemical Industries makes money, and is growing profits. 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. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To help with this, we've discovered 4 warning signs (1 is potentially serious!) that you ought to be aware of before buying any shares in Sudarshan Chemical Industries.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.