Possible Bearish Signals With AU Small Finance Bank Insiders Disposing Stock

AU Small Finance Bank Limited (NSE:AUBANK) shareholders may have reason to be concerned, as several insiders sold their shares over the past year. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for AU Small Finance Bank

AU Small Finance Bank Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Manoj Tibrewal, for ₹39m worth of shares, at about ₹683 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (₹615). So it may not tell us anything about how insiders feel about the current share price.

Happily, we note that in the last year insiders paid ₹7.0m for 11.06k shares. But insiders sold 432.21k shares worth ₹316m. In total, AU Small Finance Bank insiders sold more than they bought over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like AU Small Finance Bank better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insiders At AU Small Finance Bank Have Sold Stock Recently

The last three months saw some AU Small Finance Bank insider selling. In total, insiders sold ₹8.5m worth of shares in that time. But the good news is that they bought ₹7.0m worth. While it's not great to see insider selling, the net amount sold isn't enough for us to want to read anything into it.

Insider Ownership Of AU Small Finance Bank

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. We usually like to see fairly high levels of insider ownership. AU Small Finance Bank insiders own about ₹112b worth of shares (which is 24% 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.

What Might The Insider Transactions At AU Small Finance Bank Tell Us?

The stark truth for AU Small Finance Bank is that there has been more insider selling than insider buying in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. On the plus side, AU Small Finance Bank makes money, and is growing profits. 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 these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - AU Small Finance Bank has 1 warning sign we think you should be aware of.

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 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.