One J.K. Cement Insider Has Reduced Their Stake

From what we can see, insiders were net sellers in J.K. Cement Limited's (NSE:JKCEMENT ) during the past 12 months. That is, insiders sold the stock in greater numbers than they purchased it.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

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J.K. Cement Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Kalpana Singhania, sold ₹50m worth of shares at a price of ₹4,970 per share. That means that even when the share price was below the current price of ₹5,797, 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. We note that the biggest single sale was only 2.9% of Kalpana Singhania's holding. Kalpana Singhania was the only individual insider to sell shares in the last twelve months.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Check out our latest analysis for J.K. Cement

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Does J.K. Cement Boast High Insider Ownership?

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. We usually like to see fairly high levels of insider ownership. It's great to see that J.K. Cement insiders own 14% of the company, worth about ₹62b. 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 J.K. Cement Insider Transactions Indicate?

It doesn't really mean much that no insider has traded J.K. Cement shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the J.K. Cement insiders selling. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. While conducting our analysis, we found that J.K. Cement has 1 warning sign and it would be unwise to ignore this.

But note: J.K. Cement may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.