We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 before you buy or sell Cullen/Frost Bankers, Inc. (NYSE:CFR), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
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.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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.’
Cullen/Frost Bankers Insider Transactions Over The Last Year
Director Carlos Alvarez made the biggest insider purchase in the last 12 months. That single transaction was for US$5.1m worth of shares at a price of US$93.86 each. So it’s clear an insider wanted to buy, even at a higher price. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. That purchase may suggest an expectation of positive returns over the long term.
Happily, we note that in the last year insiders paid US$19m for 171.93k shares. On the other hand they divested 6.39k shares, for US$682k. Overall, Cullen/Frost Bankers insiders were net buyers last year. Their average price was about US$108. These transactions suggest that insiders have considered the current price of US$92.10 attractive. The chart below shows insider transactions over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at Cullen/Frost Bankers Have Bought Stock Recently
There has been significantly more insider buying, than selling, at Cullen/Frost Bankers, over the last three months. 3 insiders bought US$5.5m worth of shares. But we did see Robert Berman sell shares worth US$141k. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.
Does Cullen/Frost Bankers Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It’s great to see that Cullen/Frost Bankers insiders own 4.1% of the company, worth about US$242m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Cullen/Frost Bankers Tell Us?
The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Cullen/Frost Bankers insiders are well aligned, and quite possibly think the share price is too low. One for the watchlist, at least! If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
But note: Cullen/Frost Bankers 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.
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 firstname.lastname@example.org.