KAP Insiders Got A Good Deal Selling At R2.12

Despite a 20% gain in KAP Limited's (JSE:KAP) stock price this week, shareholders shouldn't let up. Although prices were relatively low, insiders chose to sell R1.0m worth of stock in the past 12 months. This could be a sign of impending weakness.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for KAP

The Last 12 Months Of Insider Transactions At KAP

In the last twelve months, the biggest single sale by an insider was when the CFO & Executive Director, Frans Olivier, sold R1.0m worth of shares at a price of R2.12 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of R2.97. 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 50% of Frans Olivier's holding. Frans Olivier was the only individual insider to sell shares in the last twelve months. Notably Frans Olivier was also the biggest buyer, having purchased R974k worth of shares.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Does KAP Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Based on our data, KAP insiders have about 0.4% of the stock, worth approximately R31m. I generally like to see higher levels of ownership.

So What Do The KAP Insider Transactions Indicate?

It doesn't really mean much that no insider has traded KAP shares in the last quarter. Still, the insider transactions at KAP in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some comfort. 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. For example, KAP has 3 warning signs (and 1 which is potentially serious) we think you should know about.

Of course KAP 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 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com