Stock Analysis

Trade Alert: The Chairman & MD Of KPI Green Energy Limited (NSE:KPIGREEN), Farukbhai Patel, Has Just Spent ₹7.6m Buying A Few More Shares

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Whilst it may not be a huge deal, we thought it was good to see that the KPI Green Energy Limited (NSE:KPIGREEN) Chairman & MD, Farukbhai Patel, recently bought ₹7.6m worth of stock, for ₹762 per share. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.

Our analysis indicates that KPIGREEN is potentially undervalued!

The Last 12 Months Of Insider Transactions At KPI Green Energy

Notably, that recent purchase by Farukbhai Patel is the biggest insider purchase of KPI Green Energy shares that we've seen in the last year. That means that even when the share price was higher than ₹749 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Farukbhai Patel was the only individual insider to buy shares in the last twelve months.

Farukbhai Patel bought a total of 78.77k shares over the year at an average price of ₹442. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

NSEI:KPIGREEN Insider Trading Volume October 30th 2022

KPI Green Energy is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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. We usually like to see fairly high levels of insider ownership. KPI Green Energy insiders own 66% of the company, currently worth about ₹8.9b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About KPI Green Energy Insiders?

It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about KPI Green Energy. Nice! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To help with this, we've discovered 4 warning signs (2 can't be ignored!) that you ought to be aware of before buying any shares in KPI Green Energy.

But note: KPI Green 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, but not derivative transactions.

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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.

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