Don't Ignore The Insider Selling In Centum Electronics

We note that the Centum Electronics Limited (NSE:CENTUM) President of Strategic Electronics Business Unit, Vinod Chippalkatti, recently sold ₹6.7m worth of stock for ₹2,212 per share. It might not be a huge sale, but it did reduce their holding size 13%, hardly encouraging.

View our latest analysis for Centum Electronics

Centum Electronics Insider Transactions Over The Last Year

Notably, that recent sale by Vinod Chippalkatti is the biggest insider sale of Centum Electronics shares that we've seen in the last year. So what is clear is that an insider saw fit to sell at around the current price of ₹2,131. While we don't usually like to see insider selling, it's more concerning if the sales take place 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.

Centum Electronics 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!

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Does Centum Electronics Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Centum Electronics insiders own about ₹19b worth of shares (which is 68% 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.

What Might The Insider Transactions At Centum Electronics Tell Us?

Insiders sold Centum Electronics shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Centum Electronics. Be aware that Centum Electronics is showing 6 warning signs in our investment analysis, and 2 of those shouldn't be ignored...

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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.