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 before you buy or sell Western Alliance Bancorporation (NYSE:WAL), you may well want to know whether insiders have been buying or selling.
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.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. 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 Western Alliance Bancorporation
CEO & Director Kenneth Vecchione made the biggest insider purchase in the last 12 months. That single transaction was for US$592k worth of shares at a price of US$56.95 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.
Over the last year, we can see that insiders have bought 14.63k shares worth US$811k. On the other hand they divested 36.33k shares, for US$2.0m. In total, Western Alliance Bancorporation insiders sold more than they bought over the last year. The average sell price was around US$54.79. Insider selling doesn’t make us excited to buy. But the selling was at much higher prices than the current share price (US$44.80), so it probably doesn’t tell us a lot about the value on offer today. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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 Western Alliance Bancorporation Have Sold Stock Recently
Over the last three months, we’ve seen significant insider selling at Western Alliance Bancorporation. In total, insiders dumped US$669k 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.
Insider Ownership of Western Alliance Bancorporation
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. Western Alliance Bancorporation insiders own about US$371m worth of shares (which is 8.0% 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.
So What Does This Data Suggest About Western Alliance Bancorporation Insiders?
Insiders haven’t bought Western Alliance Bancorporation stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn’t bring confidence, either. But it is good to see that Western Alliance Bancorporation is growing earnings. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn’t make us feel confident about the company. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Western Alliance Bancorporation.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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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.