Stock Analysis

The Chairman & MD of KPI Green Energy Limited (NSE:KPIGREEN), Farukbhai Patel, Just Bought A Few More Shares

  •  Updated
NSEI:KPIGREEN
Source: Shutterstock

Even if it's not a huge purchase, we think it was good to see that Farukbhai Patel, the Chairman & MD of KPI Green Energy Limited (NSE:KPIGREEN) recently shelled out ₹2.8m to buy stock, at ₹927 per share. Nevertheless, it only increased their shareholding by a minuscule percentage, and it wasn't a massive purchase by absolute value, either.

See our latest analysis for KPI Green Energy

The Last 12 Months Of Insider Transactions At KPI Green Energy

In the last twelve months, the biggest single sale by an insider was when the insider, Dhimantrai Joshi, sold ₹13m worth of shares at a price of ₹135 per share. That means that an insider was selling shares at slightly below the current price (₹943). 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. 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. It is worth noting that this sale was only 21% of Dhimantrai Joshi's holding.

All up, insiders sold more shares in KPI Green Energy than they bought, over the last year. The sellers received a price of around ₹131, on average. We don't gain confidence from insider selling below the recent share price. Of course, the sales could be motivated for a multitude of reasons, so we shouldn't jump to conclusions. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
NSEI:KPIGREEN Insider Trading Volume September 9th 2022

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

Does KPI Green Energy 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. A high insider ownership often makes company leadership more mindful of shareholder interests. KPI Green Energy insiders own 66% of the company, currently worth about ₹11b 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 KPI Green Energy Insiders?

It is good to see the recent insider purchase. But we can't say the same for the transactions over the last 12 months. The high levels of insider ownership, and the recent buying by an insider suggests they are well aligned and optimistic. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 2 warning signs for KPI Green Energy you should be aware of.

Of course KPI Green Energy may not be the best stock to buy. So you may wish to see this free collection of high quality 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.

Valuation is complex, but we're helping make it simple.

Find out whether KPI Green Energy is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

About NSEI:KPIGREEN

KPI Green Energy

KPI Green Energy Limited generates and supplies solar power under Solarism brand name in India.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation1
Future Growth0
Past Performance1
Financial Health2
Dividends1

Read more about these checks in the individual report sections or in our analysis model.

Imperfect balance sheet and overvalued.