Selling ₹1.6b Of Stock Was Lucrative Decision For Shanti Educational Initiatives Insiders
While Shanti Educational Initiatives Limited (NSE:SEIL) shareholders have enjoyed a good week with stock up 10%, they need remain vigilant. The fact that insiders chose to dispose of ₹1.6b worth of stock in the past 12 months even though prices were relatively low could be indicative of some anticipated weakness.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
Shanti Educational Initiatives Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the insider, Jaiprakash Chiripal, for ₹226m worth of shares, at about ₹189 per share. That means that even when the share price was below the current price of ₹200, 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 4.0% of Jaiprakash Chiripal's stake.
Shanti Educational Initiatives insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
See our latest analysis for Shanti Educational Initiatives
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Shanti Educational Initiatives Insiders Are Selling The Stock
The last three months saw significant insider selling at Shanti Educational Initiatives. In total, insiders dumped ₹189m 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.
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. Shanti Educational Initiatives insiders own about ₹16b worth of shares (which is 49% 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 Shanti Educational Initiatives Tell Us?
Insiders sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Shanti Educational Initiatives. To help with this, we've discovered 3 warning signs (1 is significant!) that you ought to be aware of before buying any shares in Shanti Educational Initiatives.
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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