Mangalam Worldwide Insiders Sold ₹104m Of Shares Suggesting Hesitancy

Simply Wall St · 10/15 00:41

Quite a few Mangalam Worldwide Limited (NSE:MWL) insiders sold their shares over the past year, which may be a cause for concern. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. 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 Mangalam Worldwide

The Last 12 Months Of Insider Transactions At Mangalam Worldwide

Over the last year, we can see that the biggest insider sale was by the Executive Chairman, Vipin Prakash Mangal, for ₹14m worth of shares, at about ₹164 per share. So what is clear is that an insider saw fit to sell at around the current price of ₹161. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

Happily, we note that in the last year insiders paid ₹2.8m for 21.60k shares. On the other hand they divested 684.00k shares, for ₹104m. Over the last year we saw more insider selling of Mangalam Worldwide shares, than buying. 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!

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

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Mangalam Worldwide insiders own about ₹3.2b worth of shares (which is 77% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Mangalam Worldwide Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Mangalam Worldwide shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Mangalam Worldwide insiders selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Mangalam Worldwide. To that end, you should learn about the 4 warning signs we've spotted with Mangalam Worldwide (including 1 which doesn't sit too well with us).

But note: Mangalam Worldwide may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.