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 we'll take a look at whether insiders have been buying or selling shares in IBERIABANK Corporation (NASDAQ:IBKC).
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, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
IBERIABANK Insider Transactions Over The Last Year
The Vice Chairman & CFO, Anthony Restel, made the biggest insider sale in the last 12 months. That single transaction was for US$518k worth of shares at a price of US$74.01 each. That means that an insider was selling shares at slightly below the current price (US$77.09). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 10.3% of Anthony Restel's stake.
Happily, we note that in the last year insiders paid US$893k for 13198 shares. But insiders sold 31125.99 shares worth US$1.8m. Over the last year we saw more insider selling of IBERIABANK shares, than buying. The average sell price was around US$59.32. It's not particularly great to see insiders were selling shares at below recent prices. Of course, the sales could be motivated for a multitude of reasons, so we shouldn't jump to conclusions. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insiders at IBERIABANK Have Sold Stock Recently
The last three months saw significant insider selling at IBERIABANK. In total, insiders dumped US$526k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Does IBERIABANK 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. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that IBERIABANK insiders own 1.8% of the company, worth about US$74m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At IBERIABANK Tell Us?
Insiders haven't bought IBERIABANK stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. But since IBERIABANK is profitable and growing, we're not too worried by this. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd think twice before buying! Of course, the future is what matters most. So if you are interested in IBERIABANK, you should check out this free report on analyst forecasts for the company.
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.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.
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