Possible Bearish Signals With J. B. Chemicals & Pharmaceuticals Insiders Disposing Stock

Simply Wall St · 10/15 04:14

The fact that multiple J. B. Chemicals & Pharmaceuticals Limited (NSE:JBCHEPHARM) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

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.

View our latest analysis for J. B. Chemicals & Pharmaceuticals

J. B. Chemicals & Pharmaceuticals Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the CEO & Whole-Time Director, Nikhil Chopra, sold ₹64m worth of shares at a price of ₹1,599 per share. That means that an insider was selling shares at slightly below the current price (₹1,831). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was 100% of Nikhil Chopra's stake.

Insiders in J. B. Chemicals & Pharmaceuticals 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 want to know exactly who sold, for how much, and when, simply click on the graph below!

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NSEI:JBCHEPHARM Insider Trading Volume October 15th 2024

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Insiders At J. B. Chemicals & Pharmaceuticals Have Sold Stock Recently

The last three months saw significant insider selling at J. B. Chemicals & Pharmaceuticals. In total, insiders sold ₹160m 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.

Does J. B. Chemicals & Pharmaceuticals Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. From looking at our data, insiders own ₹193m worth of J. B. Chemicals & Pharmaceuticals stock, about 0.07% of the company. We consider this fairly low insider ownership.

So What Does This Data Suggest About J. B. Chemicals & Pharmaceuticals Insiders?

Insiders sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. On the plus side, J. B. Chemicals & Pharmaceuticals makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. While it's good to be aware of 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. You'd be interested to know, that we found 2 warning signs for J. B. Chemicals & Pharmaceuticals and we suggest you have a look.

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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.