We often see insiders buying up shares in companies that perform well over the long term. 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 Carolina Trust BancShares, Inc. (NASDAQ:CART).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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.’
The Last 12 Months Of Insider Transactions At Carolina Trust BancShares
Chairman of the Board Johnathan Rhyne made the biggest insider purchase in the last 12 months. That single transaction was for US$115k worth of shares at a price of US$8.00 each. 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. We generally consider it a positive if insiders have been buying on market, even above the current price.
Happily, we note that in the last year insiders bought 54.26k shares for a total of US$435k. Overall, Carolina Trust BancShares insiders were net buyers last year. The average buy price was around US$8.01. These transactions suggest that insiders have considered the current price of US$7.57 attractive. The chart below shows insider transactions over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Carolina Trust BancShares Insiders Bought Stock Recently
Over the last three months, we’ve seen a bit of insider buying at Carolina Trust BancShares. Insiders bought US$13k worth of shares in that time. It’s great to see that insiders are only buying, not selling. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Carolina Trust BancShares insiders own 12% of the company, currently worth about US$6.6m based on the recent share price. 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 Do The Carolina Trust BancShares Insider Transactions Indicate?
We note a that there has been a tad more insider buying than selling, recently. But overall the difference isn’t worth writing home about. On a brighter note, the transactions over the last year are encouraging. The transactions are fine but it’d be more encouraging if Carolina Trust BancShares insiders bought more shares in the company. To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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.