Have NATCO Pharma Insiders Been Selling Stock?

Anyone interested in NATCO Pharma Limited (NSE:NATCOPHARM) should probably be aware that a company insider, Mente Rao, recently divested ₹30m worth of shares in the company, at an average price of ₹1,514 each. The eyebrow raising move amounted to a reduction of 36% in their holding.

See our latest analysis for NATCO Pharma

The Last 12 Months Of Insider Transactions At NATCO Pharma

In fact, the recent sale by Mente Rao was the biggest sale of NATCO Pharma shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at slightly below the current price (₹1,557). 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. We note that the biggest single sale was only 36% of Mente Rao's holding.

In the last year NATCO Pharma insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like NATCO Pharma 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.

Insider Ownership Of NATCO Pharma

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. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that NATCO Pharma insiders own 30% of the company, worth about ₹83b. 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 NATCO Pharma Insiders?

Insiders haven't bought NATCO Pharma 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 NATCO Pharma 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. While it's good to be aware of 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. For instance, we've identified 3 warning signs for NATCO Pharma (1 is potentially serious) you should be aware of.

Of course NATCO Pharma 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 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.