Don't Ignore The Insider Selling In Kelsian Group

Some Kelsian Group Limited (ASX:KLS) shareholders may be a little concerned to see that the Non-Executive Director, Neil Smith, recently sold a substantial AU$4.9m worth of stock at a price of AU$4.80 per share. However, that sale only accounted for 4.2% of their holding, so arguably it doesn't say much about their conviction.

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Kelsian Group Insider Transactions Over The Last Year

Notably, that recent sale by Neil Smith is the biggest insider sale of Kelsian Group shares that we've seen in the last year. That means that an insider was selling shares at slightly below the current price (AU$5.02). 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 4.2% of Neil Smith's holding.

Happily, we note that in the last year insiders paid AU$4.2m for 1.13m shares. But they sold 1.03m shares for AU$4.9m. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

View our latest analysis for Kelsian Group

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Kelsian Group insiders own 20% of the company, worth about AU$273m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Kelsian Group Insider Transactions Indicate?

An insider sold Kelsian Group shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. It is good to see high insider ownership, but the insider selling leaves us cautious. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. When we did our research, we found 3 warning signs for Kelsian Group (1 can't be ignored!) that we believe deserve your full attention.

But note: Kelsian Group 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 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.