Insiders probably made the right decision selling ₹170m worth of shares earlier this year as Bajaj Finserv Ltd.’s (NSE:BAJAJFINSV)) stock dips by 6.2%.
By selling ₹170m worth of Bajaj Finserv Ltd. (NSE:BAJAJFINSV) stock at an average sell price of ₹1,348 over the last year, insiders seemed to have made the most of their holdings. The company’s market valuation decreased by ₹136b after the stock price dropped 6.2% over the past week, but insiders were spared from painful losses.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for Bajaj Finserv
The Last 12 Months Of Insider Transactions At Bajaj Finserv
In the last twelve months, the biggest single sale by an insider was when the Non-Executive Director, Rajivnayan Bajaj, sold ₹170m worth of shares at a price of ₹1,348 per share. So we know that an insider sold shares at around the present share price of ₹1,296. 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. Rajivnayan Bajaj was the only individual insider to sell over the last year.
The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insiders At Bajaj Finserv Have Sold Stock Recently
The last quarter saw substantial insider selling of Bajaj Finserv shares. In total, Non-Executive Director Rajivnayan Bajaj sold ₹170m worth of shares in that time, and we didn’t record any purchases whatsoever. Overall this makes us a bit cautious, but it’s not the be all and end all.
Does Bajaj Finserv Boast High 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’s great to see that Bajaj Finserv insiders own 3.6% of the company, worth about ₹74b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About Bajaj Finserv Insiders?
An insider hasn’t bought Bajaj Finserv stock in the last three months, but there was some selling. And even if we look at the last year, we didn’t see any purchases. But since Bajaj Finserv 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. While we like knowing 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. To that end, you should learn about the 2 warning signs we’ve spotted with Bajaj Finserv (including 1 which doesn’t sit too well with us).
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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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.
