Insiders Sold K.P. Energy Prematurely At ₹500 With Stock Trading Higher

K.P. Energy Limited's (NSE:KPEL) value has fallen 12% in the last week, but insiders who sold ₹8.8m worth of stock over the last year have had less success. Given that the average selling price of ₹500 is still lower than the current share price, insiders would probably have been better off keeping their shares.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for K.P. Energy

K.P. Energy Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Non-Executive Non Independent Director, Bhupendra Shah, for ₹4.8m worth of shares, at about ₹507 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of ₹376. So it may not tell us anything about how insiders feel about the current share price. The only individual insider seller over the last year was Bhupendra Shah.

Bhupendra Shah divested 17.52k shares over the last 12 months at an average price of ₹500. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like K.P. Energy better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. K.P. Energy insiders own 54% of the company, currently worth about ₹14b 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.

So What Does This Data Suggest About K.P. Energy Insiders?

It doesn't really mean much that no insider has traded K.P. Energy 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 K.P. Energy insiders selling. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 3 warning signs for K.P. Energy you should be aware of, and 2 of these make us uncomfortable.

But note: K.P. Energy 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.