Want to participate in a research study? Help shape the future of investing tools and earn a $60 gift card!
It is not uncommon to see companies perform well in the years after insiders buy shares. 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 Live Oak Bancshares, Inc. (NASDAQ:LOB).
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, such insiders must disclose their trading activities, and not trade on inside information.
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 Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
The Last 12 Months Of Insider Transactions At Live Oak Bancshares
In the last twelve months, the biggest single purchase by an insider was when Chairman & CEO James Mahan bought US$5.4m worth of shares at a price of US$16.08 per share. That means that even when the share price was higher, an insider wanted to purchase shares. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. That purchase may suggest an expectation of positive returns over the long term.
In the last twelve months insiders purchased 592.47k shares for US$11m. On the other hand they divested 18.00k shares, for US$526k. In the last twelve months there was more buying than selling by Live Oak Bancshares insiders. The average buy price was around US$18.85. These transactions suggest that insiders have considered the current price of US$13.64 attractive. You can see a visual depiction of insider transactions (by 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!
Live Oak Bancshares 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 Live Oak Bancshares Have Bought Stock Recently
Over the last quarter, Live Oak Bancshares insiders have spent a meaningful amount on shares. Overall, 4 insiders shelled out US$441k for shares in the company — and none sold. This makes one think the business has some good points.
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Live Oak Bancshares insiders own about US$142m worth of shares (which is 26% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At Live Oak Bancshares Tell Us?
It’s certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Live Oak Bancshares insiders are well aligned, and quite possibly think the share price is too low. That’s what I like to see! Of course, the future is what matters most. So if you are interested in Live Oak Bancshares, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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 email@example.com. 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.