Insiders are probably glad they sold their shares in Airan Limited (NSE:AIRAN) after 10% drop

By
Simply Wall St
Published
May 13, 2022
NSEI:AIRAN
Source: Shutterstock

Insiders seem to have made the most of their holdings by selling ₹17m worth of Airan Limited (NSE:AIRAN) stock at an average sell price of ₹23.88 during the past year. The company's market worth decreased by ₹250m over the past week after the stock price dropped 10%, although insiders were able to minimize their losses

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.

Check out our latest analysis for Airan

The Last 12 Months Of Insider Transactions At Airan

In the last twelve months, the biggest single sale by an insider was when the MD & Chairman, Sandeepkumar Agrawal, sold ₹11m worth of shares at a price of ₹24.00 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is ₹17.95. So it may not tell us anything about how insiders feel about the current share price.

Airan insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NSEI:AIRAN Insider Trading Volume May 13th 2022

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Does Airan 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Airan insiders own about ₹1.2b worth of shares (which is 55% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Airan Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Airan 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 Airan insider transactions don't fill us with confidence. 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. Every company has risks, and we've spotted 2 warning signs for Airan you should know about.

Of course Airan 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, but not derivative transactions.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.