Don't Ignore The Fact That This Insider Just Sold Some Shares In AU Small Finance Bank Limited (NSE:AUBANK)

By
Simply Wall St
Published
May 11, 2022
NSEI:AUBANK
Source: Shutterstock

Investors may wish to note that the Group Head of Distribution of AU Small Finance Bank Limited, Manoj Tibrewal, recently netted ₹6.9m from selling stock, receiving an average price of ₹1,390. On the bright side, that's just a small sale and only reduced their holding by 0.5%.

Check out our latest analysis for AU Small Finance Bank

AU Small Finance Bank Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Chief Risk Officer, Deepak Jain, sold ₹200m worth of shares at a price of ₹1,333 per share. So we know that an insider sold shares at around the present share price of ₹1,283. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

AU Small Finance Bank insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NSEI:AUBANK Insider Trading Volume May 11th 2022

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insider Ownership

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. A high insider ownership often makes company leadership more mindful of shareholder interests. AU Small Finance Bank insiders own about ₹118b worth of shares (which is 29% 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.

So What Do The AU Small Finance Bank Insider Transactions Indicate?

Insiders sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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. To help with this, we've discovered 2 warning signs (1 makes us a bit uncomfortable!) that you ought to be aware of before buying any shares in AU Small Finance Bank.

But note: AU Small Finance Bank 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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