Insider Sales At Pudumjee Paper Products Landed A Good Price

Simply Wall St · 10/15 00:29

Despite a 17% gain in Pudumjee Paper Products Limited's (NSE:PDMJEPAPER) stock price this week, shareholders shouldn't let up. Although prices were relatively low, insiders chose to sell ₹8.5m worth of stock in the past 12 months. This could be a sign of impending weakness.

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 Pudumjee Paper Products

Pudumjee Paper Products Insider Transactions Over The Last Year

The Chief Executive Officer Marketing, Gautam Jajodia, made the biggest insider sale in the last 12 months. That single transaction was for ₹4.8m worth of shares at a price of ₹95.16 each. So it's clear an insider wanted to take some cash off the table, even below the current price of ₹122. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 40% of Gautam Jajodia's holding. Gautam Jajodia was the only individual insider to sell shares in the last twelve months.

Gautam Jajodia sold a total of 86.00k shares over the year at an average price of ₹99.11. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NSEI:PDMJEPAPER Insider Trading Volume October 15th 2024

I will like Pudumjee Paper Products better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Pudumjee Paper Products insiders own about ₹1.7b worth of shares. That equates to 15% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Pudumjee Paper Products Tell Us?

It doesn't really mean much that no insider has traded Pudumjee Paper Products shares in the last quarter. While we feel good about high insider ownership of Pudumjee Paper Products, we can't say the same about the selling of shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Pudumjee Paper Products. Case in point: We've spotted 1 warning sign for Pudumjee Paper Products you should be aware of.

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 of direct interests only, but not derivative transactions or indirect interests.