Don't Ignore The Insider Selling In Ethos

We'd be surprised if Ethos Limited (NSE:ETHOSLTD) shareholders haven't noticed that an insider, Nagarajan Subramanian, recently sold ₹23m worth of stock at ₹3,360 per share. The eyebrow raising move amounted to a reduction of 39% in their holding.

Check out our latest analysis for Ethos

The Last 12 Months Of Insider Transactions At Ethos

In the last twelve months, the biggest single sale by an insider was when the CEO, Additional MD & Director, Pranav Saboo, sold ₹202m worth of shares at a price of ₹2,016 per share. That means that an insider was selling shares at slightly below the current price (₹3,016). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was 100% of Pranav Saboo's holding.

Ethos insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Ethos insiders own about ₹3.7b worth of shares. That equates to 5.1% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Ethos Insider Transactions Indicate?

Insiders sold Ethos shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. On the plus side, Ethos makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Ethos. Every company has risks, and we've spotted 2 warning signs for Ethos you should know about.

But note: Ethos 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.