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It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Columbia Banking System, Inc. (NASDAQ:COLB).
What Is Insider Buying?
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 would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. 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.’
The Last 12 Months Of Insider Transactions At Columbia Banking System
In the last twelve months, the biggest single sale by an insider was when Andrew McDonald sold US$118k worth of shares at a price of US$38.33 per share. So what is clear is that an insider saw fit to sell at around the current price of US$37.55. While their view may have changed since the sale, this is not a particularly positive fact. Arguably, insider selling at around current prices should give us reason to reflect on whether the stock is fully valued at the moment.
In the last twelve months insiders purchased 1.29k shares for US$46k. But insiders sold 7.19k shares worth US$295k. In total, Columbia Banking System insiders sold more than they bought over the last year. The average sell price was around US$41.09. It’s not too encouraging to see that insiders have sold at below the current price. Of course, the sales could be motivated for a multitude of reasons, so we shouldn’t jump to conclusions. 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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Columbia Banking System Insiders Are Selling The Stock
We’ve seen more insider selling than insider buying at Columbia Banking System recently. In that time, Andrew McDonald dumped US$118k worth of shares. Meanwhile insiders bought US$12k worth. Because the selling vastly outweighs the buying, we’d say this is a somewhat bearish sign.
Insider Ownership of Columbia Banking System
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Columbia Banking System insiders own about US$15m worth of shares. That equates to 0.5% 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.
What Might The Insider Transactions At Columbia Banking System Tell Us?
The stark truth for Columbia Banking System is that there has been more insider selling than insider buying in the last three months. Zooming out, the longer term picture doesn’t give us much comfort. On the plus side, Columbia Banking System makes money, and is growing profits. While insiders do own shares, they don’t own a heap, and they have been selling. We’re in no rush to buy! 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: Columbia Banking System 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.
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.