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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 shareholders might well want to know whether insiders have been buying or selling shares in Allegiance Bancshares, Inc. (NASDAQ:ABTX).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
The Last 12 Months Of Insider Transactions At Allegiance Bancshares
Over the last year, we can see that the biggest insider sale was by the , Umesh Jain, for US$1.2m worth of shares, at about US$38.12 per share. So we know that an insider sold shares at around the present share price of US$32.58. While we don’t usually like to see insider selling, it’s more concerning if the sales take price at a lower price. We note that this sale took place at around the current price, so it isn’t a major concern, though it’s hardly a good sign.
Over the last year, we can see that insiders have bought 14900 shares worth US$531k. But they sold 87941 for US$3.4m. In total, Allegiance Bancshares insiders sold more than they bought over the last year. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insiders at Allegiance Bancshares Have Bought Stock Recently
There has been significantly more insider buying, than selling, at Allegiance Bancshares, over the last three months. In total, Fred Robertson bought US$200k worth of shares in that time. But we did see insider selling worth US$104k. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.
Does Allegiance Bancshares Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Allegiance Bancshares insiders own 8.1% of the company, worth about US$56m. 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 Allegiance Bancshares Tell Us?
It is good to see the recent insider purchase. However, the longer term transactions are not so encouraging. The more recent transactions are a positive, but Allegiance Bancshares insiders haven’t shown the sustained enthusiasm that we look for, although they do own a decent number of shares, overall. Overall they seem reasonably aligned. Of course, the future is what matters most. So if you are interested in Allegiance 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.
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 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.