Insiders who sold Mittal Life Style Limited (NSE:MITTAL) earlier this year probably made the right call as market cap dropped by ₹15m

By
Simply Wall St
Published
August 21, 2021
NSEI:MITTAL
Source: Shutterstock

Insiders at Mittal Life Style Limited (NSE:MITTAL) sold ₹7.6m worth of stock at an average price of ₹11.69 a share over the past year, making the most of their investment. The company’s market cap plunged by ₹15m after price dropped by 12% last week but insiders were able to limit their loss to an extent.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Mittal Life Style

The Last 12 Months Of Insider Transactions At Mittal Life Style

There wasn't any very large single transaction over the last year, but we can still observe some trading.

Brijeshkumar Mittal ditched 646.00k shares over the year. The average price per share was ₹11.69. 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!

insider-trading-volume
NSEI:MITTAL Insider Trading Volume August 22nd 2021

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Does Mittal Life Style Boast High 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. We usually like to see fairly high levels of insider ownership. Our data indicates that Mittal Life Style insiders own about ₹14m worth of shares (which is 12% of the company). We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Does This Data Suggest About Mittal Life Style Insiders?

The fact that there have been no Mittal Life Style insider transactions recently certainly doesn't bother us. We don't take much encouragement from the transactions by Mittal Life Style insiders. The modest level of insider ownership is, at least, some comfort. While we like knowing 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 5 warning signs for Mittal Life Style (3 are potentially serious) 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, but not derivative transactions.

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