Stock Analysis

This Insider Has Just Sold Shares In City Holding Company (NASDAQ:CHCO)

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Investors may wish to note that the Executive VP & CFO of City Holding Company, David Bumgarner, recently netted US$86k from selling stock, receiving an average price of US$74.00. On the bright side, that's just a small sale and only reduced their holding by 8.9%.

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The Last 12 Months Of Insider Transactions At City Holding

The President, Charles Hageboeck, made the biggest insider sale in the last 12 months. That single transaction was for US$903k worth of shares at a price of US$69.89 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$73.18. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 21% of Charles Hageboeck's holding.

Over the last year we saw more insider selling of City Holding shares, than buying. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

NasdaqGS:CHCO Insider Trading Volume February 12th 2021

I will like City Holding better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership of City Holding

Many investors like to check how much of a company is owned by insiders. 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 City Holding insiders own 2.4% of the company, worth about US$28m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About City Holding Insiders?

Insiders haven't bought City Holding stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. But it is good to see that City Holding is growing earnings. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Our analysis shows 2 warning signs for City Holding (1 can't be ignored!) and we strongly recommend you look at these before investing.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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