Have Insiders Sold Cipla Limited (NSE:CIPLA) Shares Recently?

Anyone interested in Cipla Limited (NSE:CIPLA) should probably be aware that a company insider, Shrinivas Purandare, recently divested ₹19m worth of shares in the company, at an average price of ₹844 each. That sale was 35% of their holding, so it does make us raise an eyebrow.

Check out our latest analysis for Cipla

The Last 12 Months Of Insider Transactions At Cipla

Notably, that recent sale by Shrinivas Purandare is the biggest insider sale of Cipla shares that we've seen in the last year. That means that even when the share price was slightly below the current price of ₹860, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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. This single sale was just 35% of Shrinivas Purandare's stake.

Cipla 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!

I will like Cipla better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Does Cipla Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Cipla insiders own about ₹251b worth of shares (which is 36% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Cipla Insiders?

An insider sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. But it is good to see that Cipla is growing earnings. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. While conducting our analysis, we found that Cipla has 1 warning sign and it would be unwise to ignore this.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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