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We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we’ll take a look at whether insiders have been buying or selling shares in IDFC First Bank Limited (NSE:IDFCFIRSTB).

What Is Insider Buying?

It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.

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

View our latest analysis for IDFC First Bank

IDFC First Bank Insider Transactions Over The Last Year

While there weren’t any large insider transactions in the last twelve months, it’s still worth looking at the trading.

Over the last year, we can see that insiders have bought 212.10k shares worth ₹8.7m. But they sold 80.00k for ₹2.7m. In the last twelve months there was more buying than selling by IDFC First Bank insiders. The average buy price was around ₹41.08. It’s great to see insiders putting their own cash into the company’s stock, albeit at below the recent share price (₹45.00). 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insiders at IDFC First Bank Have Bought Stock Recently

Over the last quarter, IDFC First Bank insiders have spent a meaningful amount on shares. In total, insiders bought ₹5.0m worth of shares in that time, and we didn’t record any sales whatsoever. This makes one think the business has some good points.

Insider Ownership of IDFC First Bank

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Insiders own 1.2% of IDFC First Bank shares, worth about ₹2.6b. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.

So What Do The IDFC First Bank Insider Transactions Indicate?

It’s certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. Once you factor in the high insider ownership, it certainly seems like insiders are positive about IDFC First Bank. Nice! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for IDFC First Bank.

If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.