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 Live Oak Bancshares, Inc. (NASDAQ:LOB).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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.’
Live Oak Bancshares Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Chairman & CEO James Mahan for US$5.4m worth of shares, at about US$16.08 per share. That means that an insider was happy to buy shares at around the current price of US$18.30. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. While we always like to see insider buying, it’s less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Live Oak Bancshares share holders is that insiders were buying at near the current price.
Happily, we note that in the last year insiders bought 457k shares for a total of US$7.2m. In the last twelve months Live Oak Bancshares insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
Insiders at Live Oak Bancshares Have Bought Stock Recently
We saw some Live Oak Bancshares insider buying shares in the last three months. Chief Risk Officer of Live Oak Banking Company Susan Janson bought US$16k worth of shares in that time. It’s good to see the insider buying, as well as the lack of recent sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
Does Live Oak Bancshares Boast High Insider Ownership?
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. Live Oak Bancshares insiders own about US$187m worth of shares (which is 25% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Live Oak Bancshares Insider Transactions Indicate?
We note a that there has been a bit of insider buying recently (but no selling). Overall the buying isn’t worth writing home about. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Live Oak Bancshares insiders feel good about the company’s future. Of course, the future is what matters most. So if you are interested in Live Oak Bancshares, you should check out this free report on analyst forecasts for the company.
But note: Live Oak Bancshares 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.
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.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.