Have K.M. Sugar Mills Limited (NSE:KMSUGAR) Insiders Been Selling Their Stock?

We note that a K.M. Sugar Mills Limited (NSE:KMSUGAR) insider, Prakash Chandra Jhunjhunwala, recently sold ₹5.0m worth of stock for ₹10.00 per share. It might not be a huge sale, but it did reduce their holding size 13%, hardly encouraging.

See our latest analysis for K.M. Sugar Mills

K.M. Sugar Mills Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Executive Chairman Lakshmi Kant Dwarka Jhunjhunwala for ₹5.0m worth of shares, at about ₹10.00 per share. So it's clear an insider wanted to buy, at around the current price, which is ₹12.00. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. In this case we're pleased to report that the insider purchases were made at close to current prices.

Happily, we note that in the last year insiders paid ₹10m for 1.38m shares. But insiders sold 529.20k shares worth ₹5.3m. In the last twelve months there was more buying than selling by K.M. Sugar Mills insiders. The average buy price was around ₹7.28. It is certainly positive to see that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership of K.M. Sugar Mills

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. A high insider ownership often makes company leadership more mindful of shareholder interests. K.M. Sugar Mills insiders own 51% of the company, currently worth about ₹555m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The K.M. Sugar Mills Insider Transactions Indicate?

We note a that there has been a bit of insider buying recently (but no selling). The net investment is not enough to encourage us much. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like K.M. Sugar Mills insiders think the business has merit. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - K.M. Sugar Mills has 1 warning sign we think you should be aware of.

Of course K.M. Sugar Mills 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, but not derivative transactions.

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