Don't Ignore The Insider Selling In Kanani Industries

We'd be surprised if Kanani Industries Limited (NSE:KANANIIND) shareholders haven't noticed that the MD & Executive Director, Harshil Kanani, recently sold ₹16m worth of stock at ₹3.26 per share. On the bright side, that sale was only 5.0% of their holding, so we doubt it's very meaningful, on its own.

View our latest analysis for Kanani Industries

The Last 12 Months Of Insider Transactions At Kanani Industries

In fact, the recent sale by Harshil Kanani was the biggest sale of Kanani Industries shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at around the current price of ₹3.07. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

Harshil Kanani divested 13.09m shares over the last 12 months at an average price of ₹3.95. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

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Does Kanani Industries Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Kanani Industries insiders own 70% of the company, currently worth about ₹423m 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 Do The Kanani Industries Insider Transactions Indicate?

An insider hasn't bought Kanani Industries stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Kanani Industries. To that end, you should learn about the 4 warning signs we've spotted with Kanani Industries (including 2 which can't be ignored).

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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.

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