Who Has Been Selling MITCON Consultancy & Engineering Services Limited (NSE:MITCON) Shares?

We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we’ll take a look at whether insiders have been buying or selling shares in MITCON Consultancy & Engineering Services Limited (NSE:MITCON).

Do Insider Transactions Matter?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.

We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.

See our latest analysis for MITCON Consultancy & Engineering Services

The Last 12 Months Of Insider Transactions At MITCON Consultancy & Engineering Services

Over the last year, we can see that the biggest insider sale was by the MD & Director, Pradeep Bavadekar, for ₹10m worth of shares, at about ₹40.85 per share. So it’s clear an insider wanted to take some cash off the table, even slightly below the current price of ₹41.00. 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. This single sale was just 48% of Pradeep Bavadekar’s stake. Pradeep Bavadekar was the only individual insider to sell shares in the last twelve months.

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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insiders at MITCON Consultancy & Engineering Services Have Sold Stock Recently

The last quarter saw substantial insider selling of MITCON Consultancy & Engineering Services shares. Specifically, MD & Director Pradeep Bavadekar ditched ₹10m 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.

Insider Ownership of MITCON Consultancy & Engineering Services

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 appears that MITCON Consultancy & Engineering Services insiders own 20% of the company, worth about ₹100m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At MITCON Consultancy & Engineering Services Tell Us?

An insider hasn’t bought MITCON Consultancy & Engineering Services 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 it is good to see that MITCON Consultancy & Engineering Services is growing earnings. Insider ownership isn’t particularly high, so this analysis makes us cautious about the company. We’re in no rush to buy! So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. Be aware that MITCON Consultancy & Engineering Services is showing 5 warning signs in our investment analysis, and 2 of those are a bit unpleasant…

But note: MITCON Consultancy & Engineering Services 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, but not derivative transactions.

Promoted
If you decide to trade MITCON Consultancy & Engineering Services, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account.

This article by Simply Wall St is general in nature. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.