It is not uncommon to see companies perform well in the years after insiders buy shares. 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 SVB Financial Group (NASDAQ:SIVB).
What Is Insider Selling?
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.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
SVB Financial Group Insider Transactions Over The Last Year
Christopher Edmonds-Waters made the biggest insider sale in the last 12 months. That single transaction was for US$739k worth of shares at a price of US$319 each. Although we don’t gain confidence from insider selling, we note that this large sale was at well above current price of US$193. So it is hard to draw any strong conclusion from it.
In the last twelve months insiders netted US$2.4m for 8.14k shares sold. In total, SVB Financial Group insiders sold more than they bought over the last year. They sold for an average price of about US$300. It is certainly not great to see that insiders have sold shares in the company. But the selling was at much higher prices than the current share price (US$193), so it probably doesn’t tell us a lot about the value on offer today. You can see a visual depiction of insider transactions 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.
SVB Financial Group Insiders Are Selling The Stock
The last quarter saw substantial insider selling of SVB Financial Group shares. In total, Philip Cox dumped US$148k worth of shares in that time, and we didn’t record any purchases whatsoever. In light of this it’s hard to argue that all the directors think that the shares are a bargain.
Insider Ownership of SVB Financial Group
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It’s great to see that SVB Financial Group insiders own 0.5% of the company, worth about US$50m. 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 SVB Financial Group Insider Transactions Indicate?
An insider hasn’t bought SVB Financial Group stock in the last three months, but there was some selling. And there weren’t any purchases to give us comfort, over the last year. But since SVB Financial Group is profitable and growing, we’re not too worried by this. Insiders own shares, but we’re still pretty cautious, given the history of sales. We’re in no rush to buy! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for SVB Financial Group.
But note: SVB Financial Group 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.
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.