Stock Analysis

Have Insiders Been Buying Civista Bancshares, Inc. (NASDAQ:CIVB) Shares?

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NasdaqCM:CIVB
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It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Civista Bancshares, Inc. (NASDAQ:CIVB).

Do Insider Transactions Matter?

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 Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

Check out our latest analysis for Civista Bancshares

Civista Bancshares Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Gerald Wurm for US$204k worth of shares, at about US$19.85 per share. That means that an insider was happy to buy shares at above the current price of US$18.62. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

In the last twelve months Civista Bancshares insiders were buying shares, but not selling. The average buy price was around US$16.97. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
NasdaqCM:CIVB Insider Trading Volume February 7th 2021

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

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. We usually like to see fairly high levels of insider ownership. Civista Bancshares insiders own about US$15m worth of shares. That equates to 5.0% of the company. 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 Civista Bancshares Tell Us?

It doesn't really mean much that no insider has traded Civista Bancshares shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Civista Bancshares and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Civista Bancshares. At Simply Wall St, we've found that Civista Bancshares has 3 warning signs (1 is potentially serious!) that deserve your attention before going any further with your analysis.

Of course Civista Bancshares 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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What are the risks and opportunities for Civista Bancshares?

Civista Bancshares, Inc. operates as the financial holding company for Civista Bank that provides community banking services.

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Rewards

  • Trading at 61.5% below our estimate of its fair value

  • Earnings are forecast to grow 13.83% per year

Risks

  • Shareholders have been diluted in the past year

  • Significant insider selling over the past 3 months

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