Insiders Find Solace Selling ₹181m In Stock With Medico Remedies' Price Down 10%

Insiders seem to have made the most of their holdings by selling ₹181m worth of Medico Remedies Limited (NSE:MEDICO) stock at an average sell price of ₹50.22 during the past year. The company's market worth decreased by ₹589m over the past week after the stock price dropped 10%, although insiders were able to minimize their losses

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Medico Remedies

Medico Remedies Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Women Non-Executive Director, Rita Mehta, sold ₹91m worth of shares at a price of ₹50.69 per share. That means that even when the share price was below the current price of ₹62.16, an insider wanted to cash in some shares. 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. 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. It is worth noting that this sale was only 21% of Rita Mehta's holding.

Insiders in Medico Remedies didn't buy any shares in 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!

I will like Medico Remedies 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.

Medico Remedies Insiders Are Selling The Stock

The last three months saw significant insider selling at Medico Remedies. In total, insiders dumped ₹41m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership Of Medico Remedies

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Medico Remedies insiders own 80% of the company, currently worth about ₹4.1b 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.

What Might The Insider Transactions At Medico Remedies Tell Us?

Insiders haven't bought Medico Remedies stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. But it is good to see that Medico Remedies is growing earnings. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Medico Remedies has 2 warning signs we think you should be aware of.

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 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.