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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 Texas Capital Bancshares, Inc. (NASDAQ:TCBI).
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, most countries require that the company discloses such transactions to the market.
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 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'.
The Last 12 Months Of Insider Transactions At Texas Capital Bancshares
Over the last year, we can see that the biggest insider purchase was by Executive Chairman Larry Helm for US$994k worth of shares, at about US$33.12 per share. Even though the purchase was made at a significantly lower price than the recent price (US$68.85), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
Texas Capital Bancshares insiders may have bought shares in the last year, but they didn't sell any. They paid about US$39.43 on average. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today's share price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Texas Capital Bancshares is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Texas Capital Bancshares Insiders Bought Stock Recently
It's good to see that Texas Capital Bancshares insiders have made notable investments in the company's shares. We can see that Independent Director Robert Stallings paid US$325k for shares in the company. No-one sold. This makes one think the business has some good points.
Does Texas Capital Bancshares 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. We usually like to see fairly high levels of insider ownership. Insiders own 1.3% of Texas Capital Bancshares shares, worth about US$44m. 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 Texas Capital Bancshares Tell Us?
It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. Insiders likely see value in Texas Capital Bancshares shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Texas Capital Bancshares. To assist with this, we've discovered 3 warning signs that you should run your eye over to get a better picture of Texas Capital Bancshares.
Of course Texas Capital 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.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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