Selling M. K. Proteins Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders

Even though M. K. Proteins Limited (NSE:MKPL) has fallen by 14% over the past week , insiders who sold ₹120m worth of stock over the past year have had less luck. The average selling price of ₹10.39 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for M. K. Proteins

M. K. Proteins Insider Transactions Over The Last Year

The CFO & Whole Time Director, Vinod Kumar, made the biggest insider sale in the last 12 months. That single transaction was for ₹30m worth of shares at a price of ₹10.39 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (₹6.67). So it may not tell us anything about how insiders feel about the current share price.

Insiders in M. K. Proteins didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

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Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. M. K. Proteins insiders own 64% of the company, currently worth about ₹1.6b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The M. K. Proteins Insider Transactions Indicate?

It doesn't really mean much that no insider has traded M. K. Proteins shares in the last quarter. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of M. K. Proteins insider transactions don't fill us with confidence. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 1 warning sign for M. K. Proteins that deserve your attention before buying any shares.

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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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.