Have Insiders Been Buying Cadence Bancorporation (NYSE:CADE) Shares?
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 shareholders might well want to know whether insiders have been buying or selling shares in Cadence Bancorporation (NYSE:CADE).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
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. 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 Cadence Bancorporation
The Last 12 Months Of Insider Transactions At Cadence Bancorporation
The Independent Director Kathy Waller made the biggest insider purchase in the last 12 months. That single transaction was for US$525k worth of shares at a price of US$5.96 each. Even though the purchase was made at a significantly lower price than the recent price (US$20.46), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
Happily, we note that in the last year insiders paid US$2.2m for 259.23k shares. On the other hand they divested 100.00k shares, for US$1.1m. In the last twelve months there was more buying than selling by Cadence Bancorporation insiders. They paid about US$8.65 on average. To my mind it is good that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Cadence Bancorporation is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders at Cadence Bancorporation Have Sold Stock Recently
There was substantially more insider selling, than buying, of Cadence Bancorporation shares over the last three months. In total, Independent Director J. Wiley sold US$730k worth of shares in that time. On the other hand we note insiders bought US$115k worth of shares. The share price has moved a bit recently, but it's hard to argue that the selling is a positive.
Does Cadence Bancorporation Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Cadence Bancorporation insiders own 2.9% of the company, worth about US$75m. 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 Does This Data Suggest About Cadence Bancorporation Insiders?
Unfortunately, there has been more insider selling of Cadence Bancorporation stock, than buying, in the last three months. On the other hand, the insider transactions over the last year are encouraging. We like that insiders own a fair amount of the company. So we're not overly bothered by recent selling. 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. In terms of investment risks, we've identified 3 warning signs with Cadence Bancorporation and understanding these should be part of your investment process.
But note: Cadence Bancorporation 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.
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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