Insider Sellers Might Regret Selling Transindia Real Estate Shares at a Lower Price Than Current Market Value

Even though Transindia Real Estate Limited (NSE:TREL) has fallen by 10% over the past week , insiders who sold ₹84m worth of stock over the past year have had less luck. The average selling price of ₹43.17 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Transindia Real Estate

Transindia Real Estate Insider Transactions Over The Last Year

The insider, Shashi Kiran Shetty, made the biggest insider sale in the last 12 months. That single transaction was for ₹37m worth of shares at a price of ₹46.73 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of ₹35.74. So it may not shed much light on insider confidence at current levels. Shashi Kiran Shetty was the only individual insider to sell over the last year.

Shashi Kiran Shetty sold a total of 1.95m shares over the year at an average price of ₹43.17. 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!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Transindia Real Estate insiders own 68% of the company, currently worth about ₹6.2b 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.

So What Do The Transindia Real Estate Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Transindia Real Estate shares in the last quarter. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Transindia Real Estate insider transactions don't fill us with confidence. 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. To help with this, we've discovered 2 warning signs (1 can't be ignored!) that you ought to be aware of before buying any shares in Transindia Real Estate.

Of course Transindia Real Estate 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.