Possible Bearish Signals With Time Technoplast Insiders Disposing Stock

A number of Time Technoplast Limited (NSE:TIMETECHNO) insiders sold their shares in the last year, which may have raised concerns among investors. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more.

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.

View our latest analysis for Time Technoplast

The Last 12 Months Of Insider Transactions At Time Technoplast

In the last twelve months, the biggest single sale by an insider was when the Operation & Technical Director and Whole Time Director, Naveen Mahendra Jain, sold ₹19m worth of shares at a price of ₹299 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of ₹399. 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. 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 1.4% of Naveen Mahendra Jain's holding.

In the last year Time Technoplast insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like Time Technoplast 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.

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. Insiders own 8.9% of Time Technoplast shares, worth about ₹8.1b. 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 Time Technoplast Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. While we feel good about high insider ownership of Time Technoplast, we can't say the same about the selling of shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Time Technoplast. In terms of investment risks, we've identified 1 warning sign with Time Technoplast and understanding this should be part of your investment process.

But note: Time Technoplast 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.

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.