Kernex Microsystems (India) Insiders Sell ₹261m Of Stock, Possibly Signalling Caution

In the last year, many Kernex Microsystems (India) Limited (NSE:KERNEX) insiders sold a substantial stake in the company which may have sparked shareholders' attention. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Kernex Microsystems (India)

Kernex Microsystems (India) Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Virender Singh, sold ₹177m worth of shares at a price of ₹403 per share. That means that even when the share price was slightly below the current price of ₹404, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was 100% of Virender Singh's stake.

Kernex Microsystems (India) insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by companies and 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 free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

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. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Kernex Microsystems (India) insiders own 44% of the company, worth about ₹3.0b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Kernex Microsystems (India) Insiders?

It doesn't really mean much that no insider has traded Kernex Microsystems (India) 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 Kernex Microsystems (India) insiders selling. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Kernex Microsystems (India) is showing 5 warning signs in our investment analysis, and 2 of those are a bit concerning...

But note: Kernex Microsystems (India) 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.