Have ADF Foods Limited (NSE:ADFFOODS) Insiders Been Selling Their Stock?

We wouldn't blame ADF Foods Limited (NSE:ADFFOODS) shareholders if they were a little worried about the fact that Krish Thakkar, a company insider, recently netted about ₹90m selling shares at an average price of ₹599. That's a big disposal, and it decreased their holding size by 30%, which is notable but not too bad.

See our latest analysis for ADF Foods

ADF Foods Insider Transactions Over The Last Year

In fact, the recent sale by Krish Thakkar was the biggest sale of ADF Foods shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at slightly below the current price (₹633). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent 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 just 30% of Krish Thakkar's stake.

Over the last year, we can see that insiders have bought 215.62k shares worth ₹40m. But they sold 690.85k shares for ₹314m. Over the last year we saw more insider selling of ADF Foods shares, than buying. They sold for an average price of about ₹454. It's not too encouraging to see that insiders have sold at below the current price. But we wouldn't put too much weight on the insider selling. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

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Insider Ownership of ADF Foods

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. It appears that ADF Foods insiders own 36% of the company, worth about ₹4.6b. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At ADF Foods Tell Us?

The stark truth for ADF Foods is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But since ADF Foods 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. While we like knowing 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. Case in point: We've spotted 3 warning signs for ADF Foods you should be aware of.

But note: ADF Foods 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, but not derivative transactions.

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