Are Insiders Selling Radico Khaitan Limited (NSE:RADICO) Stock?

It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Radico Khaitan Limited (NSE:RADICO).

What Is Insider Selling?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.

Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'

View our latest analysis for Radico Khaitan

The Last 12 Months Of Insider Transactions At Radico Khaitan

Whole Time Director Krishan Singh made the biggest insider sale in the last 12 months. That single transaction was for ₹6.8m worth of shares at a price of ₹431 each. So we know that an insider sold shares at around the present share price of ₹405. They might be selling for a variety of reasons, but it's hard to argue this is a bullish sign. Arguably, insider selling at around current prices should give us reason to reflect on whether the stock is fully valued at the moment. The only individual insider seller over the last year was Krishan Singh.

You can see a visual depiction of insider transactions (by 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!

If you are like me, then you will not want to miss this freelist of growing companies that insiders are buying.

Insider Ownership of Radico Khaitan

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Insiders own 4.1% of Radico Khaitan shares, worth about ₹2.2b. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Radico Khaitan Insider Transactions Indicate?

An insider sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. But it is good to see that Radico Khaitan is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. Of course, the future is what matters most. So if you are interested in Radico Khaitan, you should check out this freereport on analyst forecasts for the company.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this freelist of interesting companies, that have HIGH return on equity and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.