Multiple Insiders Sold Thirumalai Chemicals Shares Presenting Weak Signs For Investors

A number of Thirumalai Chemicals Limited (NSE:TIRUMALCHM) insiders sold their shares in the last year, which may have raised concerns among investors. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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Thirumalai Chemicals Insider Transactions Over The Last Year

The insider, Narayan Santhanam, made the biggest insider sale in the last 12 months. That single transaction was for ₹9.5m worth of shares at a price of ₹341 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is ₹270. So it may not tell us anything about how insiders feel about the current share price.

In total, Thirumalai Chemicals insiders sold more than they bought over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for Thirumalai Chemicals

I will like Thirumalai Chemicals 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.

Insiders At Thirumalai Chemicals Have Sold Stock Recently

There was substantially more insider selling, than buying, of Thirumalai Chemicals shares over the last three months. We note insiders cashed in ₹11m worth of shares. On the other hand we note Chairman & MD Rangaswamy Parthasarathy bought ₹2.4m worth of shares , as previously mentioned . The share price has moved a bit recently, but it's hard to argue that the selling is a positive.

Insider Ownership Of Thirumalai Chemicals

Many investors like to check how much of a company is owned by 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 appears that Thirumalai Chemicals insiders own 14% of the company, worth about ₹4.0b. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Thirumalai Chemicals Insiders?

The insider sales have outweighed the insider buying, at Thirumalai Chemicals, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Thirumalai Chemicals. Case in point: We've spotted 5 warning signs for Thirumalai Chemicals you should be aware of, and 3 of these shouldn't be ignored.

Of course Thirumalai Chemicals 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 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.