Don't Ignore The Insider Selling In Prataap Snacks

Some Prataap Snacks Limited (NSE:DIAMONDYD) shareholders may be a little concerned to see that insider Rajesh Mehta recently sold a substantial ₹269m worth of stock at a price of ₹794 per share. That's a big disposal, and it decreased their holding size by 50%, which is notable but not too bad.

Check out our latest analysis for Prataap Snacks

Prataap Snacks Insider Transactions Over The Last Year

In fact, the recent sale by Rajesh Mehta was the biggest sale of Prataap Snacks shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was below the current price of ₹834, an insider wanted to cash in some shares. 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. It is worth noting that this sale was only 50% of Rajesh Mehta's holding.

Prataap Snacks insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like Prataap Snacks 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

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Prataap Snacks insiders own 17% of the company, worth about ₹3.4b. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Prataap Snacks Tell Us?

Insiders sold Prataap Snacks shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. On the plus side, Prataap Snacks 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. For example - Prataap Snacks has 1 warning sign we think you should be aware of.

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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