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Should You Be Worried About Insider Transactions At Home Bancorp, Inc. (NASDAQ:HBCP)?

Simply Wall St

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 we'll take a look at whether insiders have been buying or selling shares in Home Bancorp, Inc. (NASDAQ:HBCP).

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 would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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'.

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View our latest analysis for Home Bancorp

The Last 12 Months Of Insider Transactions At Home Bancorp

In the last twelve months, the biggest single sale by an insider was when the , Leon Maraist, sold US$273k worth of shares at a price of US$45.95 per share. While we don't usually like to see insider selling, it's more concerning if the sales take price at a lower price. The good news is that this large sale was at well above current price of US$36.51. So it is hard to draw any strong conclusion from it.

Happily, we note that in the last year insiders paid US$116k for 3000 shares. But insiders sold 31663 shares worth US$1.2m. Over the last year we saw more insider selling of Home Bancorp shares, than buying. The average sell price was around US$37.52. It's not ideal to see that insiders have sold at around the current price. Since insiders sell for many reasons, we wouldn't put too much weight on it. 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!

NasdaqGS:HBCP Recent Insider Trading, May 16th 2019
NasdaqGS:HBCP Recent Insider Trading, May 16th 2019

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Insiders at Home Bancorp Have Sold Stock Recently

We've seen more insider selling than insider buying at Home Bancorp recently. In total, insiders sold US$793k worth of shares in that time. On the other hand we note Chairman of the Board Michael Maraist bought US$35k worth of shares. Generally this level of net selling might be considered a bit bearish.

Does Home Bancorp Boast High Insider Ownership?

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. Home Bancorp insiders own about US$42m worth of shares. That equates to 12% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Home Bancorp Tell Us?

The stark truth for Home Bancorp is that there has been more insider selling than insider buying in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. But since Home Bancorp is profitable and growing, we're not too worried by this. While insiders do own shares, they don't own a heap, and they have been selling. We're in no rush to buy! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Home Bancorp.

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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 editorial-team@simplywallst.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.