KPIT Technologies Limited (NSE:KPITTECH) insiders sold ₹181m worth of stock last year which shareholders may not want to overlook

While it’s been a great week for KPIT Technologies Limited (NSE:KPITTECH) shareholders after stock gained 12%, they should consider it with a grain of salt. In spite of the relatively cheap prices, insiders made the decision to sell ₹181m worth of stock in the last 12 months. This could be a warning indicator of vulnerabilities in the future.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for KPIT Technologies

The Last 12 Months Of Insider Transactions At KPIT Technologies

In the last twelve months, the biggest single sale by an insider was when the insider, Ajay Bhagwat, sold ₹150m worth of shares at a price of ₹829 per share. That means that an insider was selling shares at slightly below the current price (₹890). 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 6.9% of Ajay Bhagwat's stake.

In the last year KPIT Technologies insiders didn't buy any company stock. 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!

I will like KPIT Technologies better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insiders At KPIT Technologies Have Sold Stock Recently

Over the last three months, we've seen significant insider selling at KPIT Technologies. In total, insiders dumped ₹169m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Does KPIT Technologies Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. KPIT Technologies insiders own 7.4% of the company, currently worth about ₹18b based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At KPIT Technologies Tell Us?

Insiders haven't bought KPIT Technologies stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. But since KPIT Technologies is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing KPIT Technologies. Every company has risks, and we've spotted 1 warning sign for KPIT Technologies you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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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.