Selling ₹650m worth of IndiaMART InterMESH Limited (NSE:INDIAMART) stock at high prices would have gotten insiders a handsome reward

By
Simply Wall St
Published
March 17, 2022
NSEI:INDIAMART
Source: Shutterstock

Despite the fact that IndiaMART InterMESH Limited (NSE:INDIAMART) stock rose 4.2% last week, insiders who sold ₹650m worth of stock in the previous 12 months are likely to be better off. Selling at an average price of ₹7,660, which is higher than the current price, may have been the best move for these insiders because their investment would have been worth less now than when they sold.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for IndiaMART InterMESH

The Last 12 Months Of Insider Transactions At IndiaMART InterMESH

Over the last year, we can see that the biggest insider sale was by the insider, Vikas Aggarwal, for ₹79m worth of shares, at about ₹7,855 per share. 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 (₹4,465). So it may not shed much light on insider confidence at current levels.

In total, IndiaMART InterMESH insiders sold more than they bought over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NSEI:INDIAMART Insider Trading Volume March 17th 2022

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does IndiaMART InterMESH Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. IndiaMART InterMESH insiders own 54% of the company, currently worth about ₹74b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At IndiaMART InterMESH Tell Us?

The fact that there have been no IndiaMART InterMESH insider transactions recently certainly doesn't bother us. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of IndiaMART InterMESH insider transactions don't fill us with confidence. 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. Every company has risks, and we've spotted 2 warning signs for IndiaMART InterMESH you should know about.

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, but not derivative transactions.

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