Have Insiders Been Selling Keytone Dairy Corporation Limited (ASX:KTD) 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 before you buy or sell Keytone Dairy Corporation Limited (ASX:KTD), you may well want to know whether insiders have been buying or selling.

What Is Insider Selling?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.

We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

View our latest analysis for Keytone Dairy

The Last 12 Months Of Insider Transactions At Keytone Dairy

In the last twelve months, the biggest single sale by an insider was when the insider, Vivienne Cheung, sold AU$508k worth of shares at a price of AU$0.23 per share. So what is clear is that an insider saw fit to sell at around the current price of AU$0.23. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

In the last year Keytone Dairy insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insider Ownership of Keytone Dairy

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 22% of Keytone Dairy shares, worth about AU$13m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Keytone Dairy Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Keytone Dairy shares in the last quarter. We don't take much encouragement from the transactions by Keytone Dairy insiders. But it's good to see that insiders own shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Keytone Dairy. For instance, we've identified 3 warning signs for Keytone Dairy (1 is a bit concerning) you should be aware of.

Of course Keytone Dairy may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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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This article by Simply Wall St is general in nature. 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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