Need To Know: Kaveri Seed Company Limited (NSE:KSCL) Insiders Have Been Buying Shares

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Kaveri Seed Company Limited (NSE:KSCL).

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'.

Check out our latest analysis for Kaveri Seed

The Last 12 Months Of Insider Transactions At Kaveri Seed

Over the last year, we can see that the biggest insider purchase was by Whole Time Director Gundavaram Devi for ₹14m worth of shares, at about ₹332 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of ₹592. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Gundavaram Devi bought 76.37k shares over the last 12 months at an average price of ₹322. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Kaveri Seed is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership of Kaveri Seed

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Kaveri Seed insiders own about ₹20b worth of shares (which is 56% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Kaveri Seed Tell Us?

The fact that there have been no Kaveri Seed insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Kaveri Seed insiders feel good about the company's future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Kaveri Seed. For example, Kaveri Seed has 2 warning signs (and 1 which is concerning) we think you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.

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