We often see insiders buying up shares in companies that perform well over the long term. 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 BankUnited, Inc. (NYSE:BKU).
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.
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. 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.’
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The Last 12 Months Of Insider Transactions At BankUnited
In the last twelve months, the biggest single sale by an insider was when Chief Operating Officer Thomas Cornish sold US$400k worth of shares at a price of US$40.02 per share. So what is clear is that an insider saw fit to sell at around the current price of US$33.89. They could have a variety of motivations for selling, but it’s still not particularly encouraging to see. We usually pause to reflect on the potential that a stock has a high valuation, if insiders have been selling at around the current price.
In total, BankUnited insiders sold more than they bought over the last year. The sellers received a price of around US$41.54, on average. Insider selling doesn’t make us excited to buy. But we note that the selling, on average, was at well above the recently traded price of US$33.89. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
BankUnited Insiders Are Selling The Stock
We have seen a bit of insider selling at BankUnited, over the last three months. Mark Bagnoli only netted US$32k selling shares, in that period. It’s not great to see insider selling, nor the lack of recent buyers. But the selling simply isn’t sufficiently substantial to be of much use as a signal.
Does BankUnited Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It appears that BankUnited insiders own 1.1% of the company, worth about US$38m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Do The BankUnited Insider Transactions Indicate?
Our data shows a little more insider selling than buying in the last three months. But the difference isn’t enough to have us worried. Recent sales exacerbate our caution arising from analysis of BankUnited insider transactions. But we do like the fact that insiders own a fair chunk of the company. Of course, the future is what matters most. So if you are interested in BankUnited, 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.