Kajaria Ceramics Limited (NSE:KAJARIACER) insiders sold ₹39m worth of stock suggesting impending weakness.

By
Simply Wall St
Published
April 22, 2022
NSEI:KAJARIACER
Source: Shutterstock

Kajaria Ceramics Limited (NSE:KAJARIACER) shareholders might have a reason to worry after multiple insiders sold their shares over the last year. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. 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 do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Kajaria Ceramics

The Last 12 Months Of Insider Transactions At Kajaria Ceramics

In the last twelve months, the biggest single sale by an insider was when the insider, Alok Kumar, sold ₹13m worth of shares at a price of ₹1,024 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of ₹1,068. 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. This single sale was 100% of Alok Kumar's stake.

Insiders in Kajaria Ceramics didn't buy any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NSEI:KAJARIACER Insider Trading Volume April 22nd 2022

I will like Kajaria Ceramics better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership of Kajaria Ceramics

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. Kajaria Ceramics insiders own 48% of the company, currently worth about ₹81b based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Kajaria Ceramics Insiders?

The fact that there have been no Kajaria Ceramics insider transactions recently certainly doesn't bother us. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Kajaria Ceramics insiders selling. 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. While conducting our analysis, we found that Kajaria Ceramics has 1 warning sign and it would be unwise to ignore it.

Of course Kajaria Ceramics 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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