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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 First Citizens BancShares, Inc. (NASDAQ:FCNC.A).
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, such insiders must disclose their trading activities, and not trade on inside information.
We don't think shareholders should simply follow insider transactions. 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.'
First Citizens BancShares Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the President, Peter Bristow, for US$9.0m worth of shares, at about US$454 per share. That means that even when the share price was slightly below the current price of US$456, an insider wanted to cash in some shares. 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 4.4% of Peter Bristow's stake.
Happily, we note that in the last year insiders paid US$255k for 600 shares. But insiders sold 40025 shares worth US$18m. In total, First Citizens BancShares insiders sold more than they bought over the last year. 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!
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 First Citizens BancShares Have Sold Stock Recently
Over the last three months, we've seen notably more insider selling, than insider buying, at First Citizens BancShares. We note Peter Bristow cashed in US$18m worth of shares. Meanwhile Chief Financial Officer Craig Nix bought US$880 worth. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the shares are not cheap.
Does First Citizens BancShares 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. We usually like to see fairly high levels of insider ownership. First Citizens BancShares insiders own 34% of the company, currently worth about US$1.7b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About First Citizens BancShares Insiders?
The insider sales have outweighed the insider buying, at First Citizens BancShares, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But since First Citizens BancShares is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
But note: First Citizens BancShares 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 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 firstname.lastname@example.org. 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.