Don't Ignore The Fact That This Insider Just Sold Some Shares In Eris Lifesciences Limited (NSE:ERIS)

By
Simply Wall St
Published
November 09, 2021
NSEI:ERIS
Source: Shutterstock

Investors may wish to note that an insider of Eris Lifesciences Limited, Himanshu Shah, recently netted ₹1.7m from selling stock, receiving an average price of ₹818. On the bright side, that's just a small sale and only reduced their holding by 0.4%.

See our latest analysis for Eris Lifesciences

Eris Lifesciences Insider Transactions Over The Last Year

Notably, that recent sale by insider Himanshu Shah was not the only time they sold Eris Lifesciences shares this year. Earlier in the year, they fetched ₹605 per share in a -₹576m sale. That means that an insider was selling shares at slightly below the current price (₹794). 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 39% of Himanshu Shah's holding.

All up, insiders sold more shares in Eris Lifesciences 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 want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
NSEI:ERIS Insider Trading Volume November 10th 2021

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Does Eris Lifesciences Boast High 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. 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's great to see that Eris Lifesciences insiders own 73% of the company, worth about ₹79b. 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 Eris Lifesciences Tell Us?

It is good to see the recent insider purchase. On the other hand the transaction history, over the last year, isn't so positive. The recent buying by an insider , along with high insider ownership, suggest that Eris Lifesciences insiders are fairly aligned, and optimistic. 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. Case in point: We've spotted 1 warning sign for Eris Lifesciences you should be aware of.

But note: Eris Lifesciences 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, but not derivative transactions.

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