It is not uncommon to see companies perform well in the years after insiders buy shares. 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 shareholders might well want to know whether insiders have been buying or selling shares in Cadence Bancorporation (NYSE:CADE).
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.
We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. 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'.
Cadence Bancorporation Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Vice Chairman, Joseph Evans, for US$1.1m worth of shares, at about US$22.91 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$7.59). So it is hard to draw any strong conclusion from it.
Over the last year, we can see that insiders have bought 264.73k shares worth US$4.0m. But insiders sold 81224.66 shares worth US$1.8m. Overall, Cadence Bancorporation insiders were net buyers last year. The chart below shows insider transactions (by individuals) 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 always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Cadence Bancorporation Insiders Bought Stock Recently
Over the last quarter, Cadence Bancorporation insiders have spent a meaningful amount on shares. Overall, ten insiders shelled out US$1.1m for shares in the company -- and none sold. This makes one think the business has some good points.
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Cadence Bancorporation insiders own 3.4% of the company, worth about US$32m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Cadence Bancorporation Insiders?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. Insiders likely see value in Cadence Bancorporation shares, given these transactions (along with notable insider ownership of the company). So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we've found that Cadence Bancorporation has 3 warning signs (1 is potentially serious!) that deserve your attention before going any further with your analysis.
But note: Cadence Bancorporation 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 currently account for open market transactions and private dispositions, but not derivative transactions.
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.
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. Thank you for reading.