This Insider Has Just Sold Shares In ADF Foods

Anyone interested in ADF Foods Limited (NSE:ADFFOODS) should probably be aware that a company insider, Krish Thakkar, recently divested ₹17m worth of shares in the company, at an average price of ₹268 each. However, the silver lining is that the sale only reduced their total holding by 1.6%, so we're hesitant to read anything much into it, on its own.

Check out our latest analysis for ADF Foods

The Last 12 Months Of Insider Transactions At ADF Foods

In fact, the recent sale by insider Krish Thakkar was not their only sale of ADF Foods shares this year. They previously made an even bigger sale of -₹20m worth of shares at a price of ₹231 per share. That means that an insider was selling shares at slightly below the current price (₹274). 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 5.7% of Krish Thakkar's stake.

Insiders in ADF Foods didn't buy any shares in the last year. 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!

I will like ADF Foods better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. ADF Foods insiders own 38% of the company, currently worth about ₹11b 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 ADF Foods Insider Transactions Indicate?

Insiders haven't bought ADF Foods 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. On the plus side, ADF Foods makes money, and is growing profits. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. 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. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of ADF Foods.

Of course ADF Foods 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 of direct interests only, but not derivative transactions or indirect interests.

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

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.