Don't Ignore The Insider Selling In Kritika Wires

Anyone interested in Kritika Wires Limited (NSE:KRITIKA) should probably be aware that the MD & Director, Hanuman Agarwal, recently divested ₹27m worth of shares in the company, at an average price of ₹20.20 each. On the bright side, that sale was only 7.4% of their holding, so we doubt it's very meaningful, on its own.

See our latest analysis for Kritika Wires

The Last 12 Months Of Insider Transactions At Kritika Wires

In fact, the recent sale by Hanuman Agarwal was the biggest sale of Kritika Wires shares made by an insider individual in the last twelve months, according to our records. So what is clear is that an insider saw fit to sell at around the current price of ₹19.66. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

Hanuman Agarwal ditched 1.84m shares over the year. The average price per share was ₹18.80. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of Kritika Wires

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data indicates that Kritika Wires insiders own about ₹630m worth of shares (which is 12% of the company). We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We do generally prefer see higher levels of insider ownership.

What Might The Insider Transactions At Kritika Wires Tell Us?

An insider sold Kritika Wires shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. But it is good to see that Kritika Wires is growing earnings. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Kritika Wires. At Simply Wall St, we found 2 warning signs for Kritika Wires that deserve your attention before buying any shares.

But note: Kritika Wires 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.