Insiders At Birlasoft Sold ₹261m In Stock, Alluding To Potential Weakness

In the last year, many Birlasoft Limited (NSE:BSOFT) insiders sold a substantial stake in the company which may have sparked shareholders' attention. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Birlasoft

Birlasoft Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the CEO, MD & Director, Angan Guha, for ₹48m worth of shares, at about ₹645 per share. So we know that an insider sold shares at around the present share price of ₹640. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

Insiders in Birlasoft didn't buy any shares in 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!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Birlasoft Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Birlasoft shares. In total, insiders sold ₹55m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Does Birlasoft 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. Birlasoft insiders own about ₹2.6b worth of shares. That equates to 1.5% of the company. 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 Birlasoft Insider Transactions Indicate?

Insiders sold Birlasoft shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. On the plus side, Birlasoft makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. While it's good to be aware of 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. Case in point: We've spotted 2 warning signs for Birlasoft you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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