Insiders of Kitex Garments Limited (NSE:KITEX) reaped rewards after their ₹128m investment jumped another ₹81m

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last week, Kitex Garments Limited (NSE:KITEX) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 14% last week, resulting in a ₹2.4b increase in the company’s market worth. As a result, their original purchase of ₹128m worth of stock is now worth ₹209m.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Kitex Garments

The Last 12 Months Of Insider Transactions At Kitex Garments

The Chairman & MD Sabu Jacob made the biggest insider purchase in the last 12 months. That single transaction was for ₹37m worth of shares at a price of ₹161 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of ₹293. Because it occurred at a lower valuation, it doesn’t tell us much about whether insiders might find today’s attractive price.

Sabu Jacob bought 715.30k shares over the last 12 months at an average price of ₹179. 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!

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NSEI:KITEX Insider Trading Volume April 13th 2022

Kitex Garments 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 of Kitex Garments

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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. It’s great to see that Kitex Garments insiders own 48% of the company, worth about ₹9.3b. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Kitex Garments Tell Us?

It’s certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Kitex Garments. Nice! So these insider transactions can help us build a thisis about the stock, but it’s also worthwhile knowing the risks facing this company. Every company has risks, and we’ve spotted 2 warning signs for Kitex Garments (of which 1 shouldn’t be ignored!) you should know about.

Of course Kitex Garments 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.

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.

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