Read This Before Buying K.P.R. Mill Limited (NSE:KPRMILL) Shares

We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in K.P.R. Mill Limited (NSE:KPRMILL).

What Is Insider Buying?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.

Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

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The Last 12 Months Of Insider Transactions At K.P.R. Mill

Over the last year, we can see that the biggest insider sale was by Founder & Whole-Time Executive Chairman K. Ramasamy for ₹5.7m worth of shares, at about ₹566 per share. So what is clear is that an insider saw fit to sell at around the current price of ₹533. They might be selling for a variety of reasons, but it's hard to argue this is a bullish sign. Arguably, insider selling at around current prices should give us reason to reflect on whether the stock is fully valued at the moment.

We note that in the last year insiders divested 30.00k shares for a total of ₹17m. In total, K.P.R. Mill insiders sold more than they bought over the last year. The average sell price was around ₹566. We don't gain much confidence from insider selling near the recent share price. Since insiders sell for many reasons, we wouldn't put too much weight on it. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like K.P.R. Mill better if I see some big insider buys. While we wait, check out this freelist of growing companies with considerable, recent, insider buying.

Does K.P.R. Mill Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. K.P.R. Mill insiders own 72% of the company, currently worth about ₹29b 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 K.P.R. Mill Insider Transactions Indicate?

The fact that there have been no K.P.R. Mill insider transactions recently certainly doesn't bother us. It's great to see high levels of insider ownership, but looking back at the last year, we don't gain confidence from the K.P.R. Mill insiders selling. Of course, the future is what matters most. So if you are interested in K.P.R. Mill, you should check out this freereport on analyst forecasts for the company.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this freelist of interesting companies.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.

Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.