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We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell K.M. Sugar Mills Limited (NSE:KMSUGAR), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
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The Last 12 Months Of Insider Transactions At K.M. Sugar Mills
While no particular insider transaction stood out, we can still look at the overall trading.
Over the last year, we can see that insiders have bought 580k shares worth ₹4.6m. On the other hand they divested 449k shares, for ₹4.0m. Overall, K.M. Sugar Mills insiders were net buyers last year. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
K.M. Sugar Mills is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Have K.M. Sugar Mills Insiders Traded Recently?
We saw insider selling worth ₹209k in the last three months. However that only slightly eclipses the ₹44k worth of purchases. The net selling is so small that it's hard to draw any conclusions from these recent transactions.
Does K.M. Sugar Mills Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. K.M. Sugar Mills insiders own about ₹375m worth of shares (which is 48% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.