We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Guaranty Bancshares, Inc. (NASDAQ:GNTY).
What Is Insider Buying?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. 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 Guaranty Bancshares
Over the last year, we can see that the biggest insider purchase was by insider Richard Baker for US$3.0m worth of shares, at about US$30.00 per share. So it's clear an insider wanted to buy, at around the current price, which is US$32.85. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. In this case we're pleased to report that the insider purchases were made at close to current prices.
In the last twelve months insiders purchased 116225 shares for US$3.5m. On the other hand they divested 14627 shares, for US$474k. In total, Guaranty Bancshares insiders bought more than they sold over the last year. 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!
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).
Insiders at Guaranty Bancshares Have Sold Stock Recently
We've seen more insider selling than insider buying at Guaranty Bancshares recently. In that time, insiders dumped US$444k worth of shares. Meanwhile insider Margaret Curl bought US$40k worth. Generally this level of net selling might be considered a bit bearish.
Insider Ownership of Guaranty Bancshares
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. I reckon it's a good sign if insiders own a significant number of shares in the company. Guaranty Bancshares insiders own about US$83m worth of shares. That equates to 22% of the company. 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 Does This Data Suggest About Guaranty Bancshares Insiders?
Unfortunately, there has been more insider selling of Guaranty Bancshares stock, than buying, in the last three months. In contrast, they appear keener if you look at the last twelve months. We like that insiders own a fair amount of the company. So we're happy enough to look past some selling. Of course, the future is what matters most. So if you are interested in Guaranty Bancshares, you should check out this free report on analyst forecasts for the company.
Of course Guaranty Bancshares 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.
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.
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