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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Capital Bancorp, Inc. (NASDAQ:CBNK).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. 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 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.'
Capital Bancorp Insider Transactions Over The Last Year
The Director, Michael Burke, made the biggest insider sale in the last 12 months. That single transaction was for US$655k worth of shares at a price of US$11.69 each. That means that even when the share price was below the current price of US$12.36, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling on market, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 17% of Michael Burke's stake.
Happily, we note that in the last year insiders paid US$364k for 29100 shares. But they sold 151k for US$1.8m. Over the last year we saw more insider selling of Capital Bancorp shares, than buying. You can see the insider transactions (by 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!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Capital Bancorp Insiders Are Selling The Stock
We have seen a bit of insider selling at Capital Bancorp, over the last three months. Kathleen Yamada divested only US$48k worth of shares in that time. Neither the lack of buying nor the presence of selling is heartening. But the volume sold is so low that it really doesn't bother us.
Insider Ownership of Capital Bancorp
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Capital Bancorp insiders own about US$66m worth of shares. That equates to 39% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Capital Bancorp Insider Transactions Indicate?
While there has not been any insider buying in the last three months, there has been selling. But given the selling was modest, we're not worried. Recent insider selling makes us a little nervous, in light of the broader picture of Capital Bancorp insider transactions. But it's good to see that insiders own shares in the company. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Capital Bancorp.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.