Stock Analysis

David Taylor Is The President of VersaBank (TSE:VB) And They Just Picked Up 2.7% More Shares

  •  Updated
TSX:VBNK
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Investors who take an interest in VersaBank (TSE:VB) should definitely note that the President, David Taylor, recently paid CA$11.25 per share to buy CA$317k worth of the stock. While that's a very decent purchase to our minds, it was proportionally a bit modest, boosting their holding by just 2.7%.

Check out our latest analysis for VersaBank

The Last 12 Months Of Insider Transactions At VersaBank

Notably, that recent purchase by David Taylor is the biggest insider purchase of VersaBank shares that we've seen in the last year. So it's clear an insider wanted to buy, at around the current price, which is CA$12.49. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for VersaBank share holders is that insiders were buying at near the current price.

In the last twelve months insiders purchased 190.88k shares for CA$1.5m. On the other hand they divested 700.00 shares, for CA$7.9k. In the last twelve months there was more buying than selling by VersaBank insiders. The average buy price was around CA$7.77. We don't deny that it is nice to see insiders buying stock in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. The chart below shows insider transactions (by companies and 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!

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TSX:VB Insider Trading Volume February 12th 2021

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 14% of VersaBank shares, worth about CA$38m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At VersaBank Tell Us?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. Given that insiders also own a fair bit of VersaBank we think they are probably pretty confident of a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To help with this, we've discovered 2 warning signs (1 is significant!) that you ought to be aware of before buying any shares in VersaBank.

Of course VersaBank 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.

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