Despite a 4.7% increase in IIFL Finance Limited (NSE:IIFL) share price this week, shareholders should not budge. Although prices were relatively low, experts opted to sell Rs 26 crore worth of shares in the last 12 months. This could be a sign of impending weakness.
While insider trading is not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider trading altogether.
Our analysis indicates that IIFL is potentially underrated!
IIFL Finance Insider Transactions during the last year
While no particular internal transaction was highlighted, we can still see general trading.
During the last year, we can see that the experts bought 4.85 thousand shares worth ₹1.7 million. On the other hand, they divested 76.58k shares, for ₹26m. In total, experts sold more shares in IIFL Finance than they bought in the last year. You can see the internal transactions (by companies and individuals) during the last year shown in the graph below. By clicking on the chart below, you can see the precise details of each internal transaction!
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Does IIFL Finance have high internal ownership?
Looking at the total insider holdings in a company can help inform your view of whether they are well aligned with common shareholders. Typically, the greater the insider ownership, the more likely insiders will be incentivized to build the company for the long term. IIFL Finance experts own shares worth around ₹36b (which is 25% of the company). I like to see this level of internal ownership, because it increases the chances that management is thinking about the best interests of shareholders.
What could internal transactions at IIFL Finance tell us?
The fact that there have been no intra-IIFL Finance transactions recently certainly doesn’t bother us. It is encouraging that insiders own a lot of stocks, but we would like to see more insider buying as IIFL Finance’s last year of insider trading does not fill us with confidence. So these insider trading can help us build a thesis on the stock, but it’s also worth learning about the risks this company faces. In conducting our analysis, we find that IIFL Finance has 1 warning sign and it would be unwise to ignore it.
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For the purposes of this article, insiders are those individuals who report their operations to the corresponding regulatory body. We currently account for open market transactions and private disposals, but not derivative transactions.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock, and it does not take into account your goals or financial situation. Our goal is to provide you with long-term focused analysis driven by fundamental data. Please note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative material. Simply Wall St has no position in any of the stocks mentioned.
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