Don't Ignore The Insider Selling In JNK India

Investors may wish to note that an insider of JNK India Limited, Deepak Sake, recently netted ₹5.3m from selling stock, receiving an average price of ₹611. It wasn't a huge sale, but it did reduce their holding by 19%. This does not instill confidence.

View our latest analysis for JNK India

The Last 12 Months Of Insider Transactions At JNK India

Over the last year, we can see that the biggest insider sale was by the insider, Mohsin Shaikh, for ₹7.4m worth of shares, at about ₹188 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of ₹599. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was 81% of Mohsin Shaikh's holding.

JNK India insiders didn't buy any shares over the last year. 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 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

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that JNK India insiders own 21% of the company, worth about ₹7.0b. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About JNK India Insiders?

Insiders sold JNK India shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. But since JNK India is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. 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. For example, JNK India has 2 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

But note: JNK India 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.