How Much Are ICICI Bank Limited (NSE:ICICIBANK) Insiders Taking Off The Table?

It is not uncommon to see companies perform well in the years after insiders buy shares. 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 shareholders might well want to know whether insiders have been buying or selling shares in ICICI Bank Limited (NSE:ICICIBANK).

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, such insiders must disclose their trading activities, and not trade on inside information.

Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

See our latest analysis for ICICI Bank

The Last 12 Months Of Insider Transactions At ICICI Bank

The insider, Narayanan Kannan, made the biggest insider sale in the last 12 months. That single transaction was for ₹148m worth of shares at a price of ₹442 each. That means that even when the share price was below the current price of ₹514, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was 100% of Narayanan Kannan's stake.

Happily, we note that in the last year insiders paid ₹5.3m for 17.45k shares. But they sold 5.01m shares for ₹2.4b. All up, insiders sold more shares in ICICI Bank than they bought, over the last year. They sold for an average price of about ₹478. It's not particularly great to see insiders were selling shares at below recent prices. Since insiders sell for many reasons, we wouldn't put too much weight on it. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insiders at ICICI Bank Have Sold Stock Recently

We've seen more insider selling than insider buying at ICICI Bank recently. We note insiders cashed in ₹1.9b worth of shares. Meanwhile insider Vikash Sharma bought ₹2.4m worth. Generally this level of net selling might be considered a bit bearish.

Insider Ownership of ICICI Bank

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. ICICI Bank insiders own 0.2% of the company, currently worth about ₹7.6b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The ICICI Bank Insider Transactions Indicate?

The stark truth for ICICI Bank is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. On the plus side, ICICI Bank makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To assist with this, we've discovered 3 warning signs that you should run your eye over to get a better picture of ICICI Bank.

But note: ICICI 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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This article 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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