Stock Analysis

Valiant Organics Limited's (NSE:VALIANTORG)) market cap declines to ₹12b but insiders who sold ₹119m stock were able to hedge their losses

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Insiders seem to have made the most of their holdings by selling ₹119m worth of Valiant Organics Limited (NSE:VALIANTORG) stock at an average sell price of ₹726 during the past year. The company’s market cap plunged by ₹2.0b after price dropped by 14% last week but insiders were able to limit their loss to an extent.

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.

Check out our latest analysis for Valiant Organics

The Last 12 Months Of Insider Transactions At Valiant Organics

The insider, Vicky Gala, made the biggest insider sale in the last 12 months. That single transaction was for ₹44m worth of shares at a price of ₹608 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (₹428). So it is hard to draw any strong conclusion from it. Notably Vicky Gala was also the biggest buyer, having purchased ₹120k worth of shares.

Over the last year, we can see that insiders have bought 200.00 shares worth ₹120k. But they sold 163.76k shares for ₹119m. All up, insiders sold more shares in Valiant Organics than they bought, over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

NSEI:VALIANTORG Insider Trading Volume February 3rd 2023

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Valiant Organics Insiders Are Selling The Stock

We have seen a bit of insider selling at Valiant Organics, over the last three months. insider Indira Dedhia divested only ₹2.9m worth of shares in that time. It's not great to see insider selling, nor the lack of recent buyers. But the amount sold isn't enough for us to put any weight on it.

Insider Ownership Of Valiant Organics

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Valiant Organics insiders own 58% of the company, currently worth about ₹6.8b based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Valiant Organics Insiders?

An insider hasn't bought Valiant Organics stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 1 warning sign for Valiant Organics you should know about.

Of course Valiant Organics 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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