L&T Technology Services Limited (NSE:LTTS) insiders probably sold ₹1.1b stock despite low prices because they anticipated some weakness – Simply Wall St

L&T Technology Services Limited's (NSE:LTTS) value has fallen 4.2% in the last week, but insiders who sold ₹1.1b worth of stock over the last year have had less success. The average selling price of ₹3,123 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.
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 L&T Technology Services
The Non-Executive Director, Keshab Panda, made the biggest insider sale in the last 12 months. That single transaction was for ₹58m worth of shares at a price of ₹2,880 each. So it's clear an insider wanted to take some cash off the table, even below the current price of ₹4,644. 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. We note that the biggest single sale was only 25% of Keshab Panda's holding.
Happily, we note that in the last year insiders paid ₹7.1m for 3.00k shares. But they sold 364.10k shares for ₹1.1b. In total, L&T Technology Services insiders sold more than they bought over the last year. The sellers received a price of around ₹3,123, on average. It's not particularly great to see insiders were selling shares at below recent prices. Since insiders sell for many reasons, we wouldn't put too much weight on it. You can see the insider transactions (by companies and 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!
I will like L&T Technology Services better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Over the last three months, we've seen notably more insider selling, than insider buying, at L&T Technology Services. In that time, insiders dumped ₹648m worth of shares. On the other hand we note Founder Chairman Anilkumar Naik bought ₹3.6m worth of shares. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the company has been fully valued in recent months.
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. It appears that L&T Technology Services insiders own 0.7% of the company, worth about ₹3.6b. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
Unfortunately, there has been more insider selling of L&T Technology Services stock, than buying, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. On the plus side, L&T Technology Services makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing L&T Technology Services. At Simply Wall St, we found 3 warning signs for L&T Technology Services that deserve your attention before buying any shares.
But note: L&T Technology 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.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

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