Don't Ignore The Insider Selling In Sigachi Industries

Anyone interested in Sigachi Industries Limited (NSE:SIGACHI) should probably be aware that the CEO, MD & Director, Amit Sinha, recently divested ₹17m worth of shares in the company, at an average price of ₹44.85 each. On the bright side, that sale was only 2.9% of their holding, so we doubt it's very meaningful, on its own.

Check out our latest analysis for Sigachi Industries

The Last 12 Months Of Insider Transactions At Sigachi Industries

The Chief Financial Officer, Subbarami Oruganti, made the biggest insider sale in the last 12 months. That single transaction was for ₹37m worth of shares at a price of ₹49.77 each. 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 (₹41.71). So it may not shed much light on insider confidence at current levels.

In total, Sigachi Industries insiders sold more than they bought 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 want to know exactly who sold, for how much, and when, simply click on the graph below!

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Does Sigachi Industries Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It appears that Sigachi Industries insiders own 39% of the company, worth about ₹5.4b. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Sigachi Industries Insider Transactions Indicate?

Insiders haven't bought Sigachi Industries stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. On the plus side, Sigachi Industries makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 1 warning sign for Sigachi Industries and we suggest you have a look.

But note: Sigachi Industries 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 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.