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Should You Be Worried About Insider Transactions At TriCo Bancshares (NASDAQ:TCBK)?

Andrew Carroll

We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 TriCo Bancshares (NASDAQ:TCBK).

Do Insider Transactions Matter?

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

See our latest analysis for TriCo Bancshares

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TriCo Bancshares Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by Director W. Walker for US$122k worth of shares, at about US$35.48 per share. So it’s clear an insider wanted to take some cash off the table, even slightly below the current price of US$35.72. While sellers have a variety of reasons for selling, this isn’t particularly great to see. When an insider sells below the current price, it does tend to make us wonder about the current valuation. Please note, however, that this single sale was just 32.7% of W. Walker’s stake.

In total, TriCo Bancshares insiders sold more than they bought over the last year. The average sell price was around US$35.57. It’s not particularly great to see insiders were selling shares around current prices. But we don’t put too much weight on the insider selling, since sellers could have personal reasons. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

NasdaqGS:TCBK Insider Trading January 21st 19

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insiders at TriCo Bancshares Have Sold Stock Recently

We’ve seen more insider selling than insider buying at TriCo Bancshares recently. We note insiders cashed in US$194k worth of shares. Meanwhile EVP & CFO Peter Wiese bought US$45k worth, as we said above. Since the selling really does outweigh the buying, we’d say that these transactions may suggest that some insiders feel the shares are not cheap.

Insider Ownership of TriCo Bancshares

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 7.4% of TriCo Bancshares shares, worth about US$81m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About TriCo Bancshares Insiders?

Unfortunately, there has been more insider selling of TriCo Bancshares stock, than buying, in the last three months. And our longer term analysis of insider transactions didn’t bring confidence, either. Insider ownership isn’t particularly high, so this analysis makes us cautious about the company. We’re in no rush to buy! Of course, the future is what matters most. So if you are interested in TriCo Bancshares, you should check out this free report on analyst forecasts for the company.

If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity 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 editorial-team@simplywallst.com.