Insiders At KDDL Sold ₹235m Of Stock Potentially Indicating Weakness

Despite the fact that KDDL Limited (NSE:KDDL) stock rose 10% last week, insiders who sold ₹235m worth of stock in the previous 12 months are likely to be better off. Selling at an average price of ₹3,694, which is higher than the current price might have been the right call as holding on to stock would have meant their investment would be worth less now than it was at the time of sale.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for KDDL

KDDL Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Whole-Time Executive Chairman & MD, Yashovardhan Saboo, for ₹153m worth of shares, at about ₹3,700 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of ₹2,917. So it may not tell us anything about how insiders feel about the current share price.

In the last year KDDL 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!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Insiders At KDDL Have Sold Stock Recently

The last quarter saw substantial insider selling of KDDL shares. Specifically, insiders ditched ₹233m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Does KDDL 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. I reckon it's a good sign if insiders own a significant number of shares in the company. KDDL insiders own about ₹15b worth of shares (which is 40% of the company). 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 KDDL Insiders?

Insiders haven't bought KDDL stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. But since KDDL is profitable and growing, we're not too worried by this. 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 KDDL. Every company has risks, and we've spotted 2 warning signs for KDDL you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.