C. E. Info Systems Insiders Sell ₹1.5b Of Stock, Possibly Signalling Caution

In the last year, many C. E. Info Systems Limited (NSE:MAPMYINDIA) 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 C. E. Info Systems

C. E. Info Systems Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Co-Founder, Rakesh Verma, sold ₹1.2b worth of shares at a price of ₹2,314 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of ₹2,032. So it may not tell us anything about how insiders feel about the current share price.

Over the last year, we can see that insiders have bought 1.03k shares worth ₹2.2m. On the other hand they divested 648.40k shares, for ₹1.5b. In total, C. E. Info Systems insiders sold more than they bought 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!

I will like C. E. Info Systems better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

C. E. Info Systems Insiders Are Selling The Stock

Over the last three months, we've seen notably more insider selling, than insider buying, at C. E. Info Systems. In that time, insiders dumped ₹123m worth of shares. On the flip side, insiders spent ₹2.2m on purchasing shares (as mentioned above) . Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the company has been fully valued in recent months.

Does C. E. Info Systems Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. C. E. Info Systems insiders own about ₹58b worth of shares (which is 52% of the company). 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 C. E. Info Systems Insider Transactions Indicate?

The stark truth for C. E. Info Systems is that there has been more insider selling than insider buying in the last three months. Zooming out, the longer term picture doesn't give us much comfort. But since C. E. Info Systems is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 1 warning sign with C. E. Info Systems and understanding this should be part of your investment process.

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 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.