J. B. Chemicals & Pharmaceuticals Insiders Sell ₹70m Of Stock, Possibly Signalling Caution

Over the past year, many J. B. Chemicals & Pharmaceuticals Limited (NSE:JBCHEPHARM) insiders sold a significant stake in the company which may have piqued investors' interest. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. 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.

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

Over the last year, we can see that the biggest insider sale was by the CEO & Whole-Time Director, Nikhil Chopra, for ₹47m worth of shares, at about ₹1,571 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of ₹1,850. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 30% of Nikhil Chopra's holding.

Insiders in J. B. Chemicals & Pharmaceuticals didn't buy any shares in the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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

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Insider Ownership Of J. B. Chemicals & Pharmaceuticals

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 ₹372m worth of J. B. Chemicals & Pharmaceuticals stock, about 0.1% of the company. I generally like to see higher levels of ownership.

So What Do The J. B. Chemicals & Pharmaceuticals Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. While we feel good about high insider ownership of J. B. Chemicals & Pharmaceuticals, we can't say the same about the selling of shares. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of J. B. Chemicals & Pharmaceuticals.

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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.

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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.