Don't Ignore The Fact That This Insider Just Sold Some Shares In Ramco Systems Limited (NSE:RAMCOSYS)

Investors may wish to note that an insider of Ramco Systems Limited, G. Venkata Narayana, recently netted ₹3.7m from selling stock, receiving an average price of ₹597. That might not be a huge sum but it was 76% of their personal holding, so we find it a little discouraging.

View our latest analysis for Ramco Systems

Ramco Systems Insider Transactions Over The Last Year

Notably, that recent sale by G. Venkata Narayana is the biggest insider sale of Ramco Systems shares that we've seen in the last year. That means that even when the share price was slightly below the current price of ₹600, an insider wanted to cash in some shares. 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was 76% of G. Venkata Narayana's holding.

Over the last year we saw more insider selling of Ramco Systems shares, than buying. 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!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Ramco Systems insiders own 20% of the company, worth about ₹3.6b. 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 Ramco Systems Insider Transactions Indicate?

Insiders sold Ramco Systems shares recently, but they didn't buy any. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But since Ramco Systems is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. You'd be interested to know, that we found 2 warning signs for Ramco Systems and we suggest you have a look.

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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