It is not uncommon to see companies perform well in the years after insiders buy shares. 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 Stock Yards Bancorp, Inc. (NASDAQ:SYBT).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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 equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
Stock Yards Bancorp Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Senior EVP & Director, Kathy Thompson, sold US$203k worth of shares at a price of US$35.31 per share. That means that even when the share price was slightly below the current price of US$35.76, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 8.3% of Kathy Thompson's stake.
Happily, we note that in the last year insiders paid US$680k for 20490.92 shares. On the other hand they divested 33867.86 shares, for US$1.2m. In total, Stock Yards Bancorp 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. By clicking on the graph below, you can see the precise details of each insider transaction!
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 Stock Yards Bancorp Have Sold Stock Recently
Over the last three months, we've seen notably more insider selling, than insider buying, at Stock Yards Bancorp. We note insiders cashed in US$413k worth of shares. Meanwhile insiders bought US$65k 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.
Insider Ownership of Stock Yards Bancorp
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It appears that Stock Yards Bancorp insiders own 5.8% of the company, worth about US$47m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Stock Yards Bancorp Tell Us?
The insider sales have outweighed the insider buying, at Stock Yards Bancorp, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. On the plus side, Stock Yards Bancorp makes money, and is growing profits. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. Of course, the future is what matters most. So if you are interested in Stock Yards Bancorp, you should check out this free report on analyst forecasts for the company.
Of course Stock Yards Bancorp may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
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 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.