We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Zions Bancorporation, National Association (NASDAQ:ZION), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
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, rules govern insider transactions, and certain disclosures are required.
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. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
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The Last 12 Months Of Insider Transactions At Zions Bancorporation National Association
Over the last year, we can see that the biggest insider sale was by President Scott McLean for US$984k worth of shares, at about US$55.25 per share. So we know that an insider sold shares at around the present share price of US$47.05. 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.
Happily, we note that in the last year insiders paid US$335k for 7.01k shares. But insiders sold 99.34k shares worth US$5.3m. Over the last year we saw more insider selling of Zions Bancorporation National Association shares, than buying. The average sell price was around US$53.19. It’s not ideal to see that insiders have sold at around the current price. Since insiders sell for many reasons, we wouldn’t put too much weight on it. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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Insiders at Zions Bancorporation National Association Have Sold Stock Recently
We’ve seen more insider selling than insider buying at Zions Bancorporation National Association recently. In total, insiders sold US$930k worth of shares in that time. On the other hand we note insiders bought US$335k worth of shares, as previously mentioned. Because the selling vastly outweighs the buying, we’d say this is a somewhat bearish sign.
Does Zions Bancorporation National Association Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Zions Bancorporation National Association insiders own 1.2% of the company, currently worth about US$105m 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 Do The Zions Bancorporation National Association Insider Transactions Indicate?
The stark truth for Zions Bancorporation National Association 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. But it is good to see that Zions Bancorporation National Association 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 Zions Bancorporation National Association.
Of course Zions Bancorporation National Association may not be the best stock to buy. So you may wish to see this free collection of high quality 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.