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We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in The Phoenix Mills Limited (NSE:PHOENIXLTD).
What Is Insider Selling?
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 would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. 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'.
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Phoenix Mills Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the , Haresh Morajkar, for ₹6.0m worth of shares, at about ₹600 per share. That means that even when the share price was below the current price of ₹641, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling on market, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 25% of Haresh Morajkar's stake.
Over the last year, we note insiders sold 58500 shares worth ₹37m. Phoenix Mills insiders didn't buy any shares over the last year. You can see the insider transactions (by 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!
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Insiders at Phoenix Mills Have Sold Stock Recently
Over the last three months, we've seen significant insider selling at Phoenix Mills. In total, insiders dumped ₹28m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.