Multiple Insiders Sold Muthoot Finance Shares Presenting Weak Signs For Investors

Muthoot Finance Limited (NSE:MUTHOOTFIN) shareholders might have a reason to worry after multiple insiders sold their shares over the last year. 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, if numerous insiders are selling, shareholders should investigate more.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Muthoot Finance

Muthoot Finance Insider Transactions Over The Last Year

There wasn’t any very large single transaction over the last year, but we can still observe some trading.

Insiders in Muthoot Finance didn’t buy any shares in 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 Muthoot Finance better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insiders At Muthoot Finance Have Sold Stock Recently

The last three months saw significant insider selling at Muthoot Finance. Specifically, insiders ditched ₹4.9m worth of shares in that time, and we didn’t record any purchases whatsoever. In light of this it’s hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership Of Muthoot Finance

For a common shareholder, it is worth checking how many shares are held by company 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 Muthoot Finance insiders own 73% of the company, worth about ₹311b. 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 Muthoot Finance Tell Us?

Insiders sold stock recently, but they haven’t been buying. And even if we look at the last year, we didn’t see any purchases. The company boasts high insider ownership, but we’re a little hesitant, given the history of share sales. 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. At Simply Wall St, we’ve found that Muthoot Finance has 3 warning signs (1 doesn’t sit too well with us!) that deserve your attention before going any further with your analysis.

Of course Muthoot Finance may not be the best stock to buy. So you may wish to see this free collection of high quality 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, 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.