Investors may wish to note that the Whole Time Director of Radico Khaitan Limited, Krishan Singh, recently netted ₹7.1m from selling stock, receiving an average price of ₹708. It wasn’t a huge sale, but it did reduce their holding by 26%. This does not instill confidence.

Radico Khaitan Insider Transactions Over The Last Year

Notably, that recent sale by Krishan Singh is the biggest insider sale of Radico Khaitan shares that we’ve seen in the last year. So it’s clear an insider wanted to take some cash off the table, even slightly below the current price of ₹711. 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 just 26% of Krishan Singh’s stake.

In the last twelve months insiders purchased 7.10k shares for ₹3.8m. On the other hand they divested 10.00k shares, for ₹7.1m. 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!

NSEI:RADICO Insider Trading Volume June 11th 2021

Insider Ownership

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Radico Khaitan insiders own about ₹4.2b worth of shares. That equates to 4.4% of the company. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.

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So What Does This Data Suggest About Radico Khaitan Insiders?

Unfortunately, there has been more insider selling of Radico Khaitan stock, than buying, in the last three months. Zooming out, the longer term picture doesn’t give us much comfort. But it is good to see that Radico Khaitan is growing earnings. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn’t make us feel confident about the company. 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. Every company has risks, and we’ve spotted 1 warning sign for Radico Khaitan you should know about.

This article is by Simply Wall St is general in nature. 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.
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