Stock Analysis

Community West Bancshares' stock is down 11%, but insiders still have about US$38k in profit after buying earlier this year

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Insiders who bought Community West Bancshares (NASDAQ:CWBC) stock lover the last 12 months are probably not as affected by last week’s 11% loss. Reason being, despite the recent loss, insiders original purchase value of US$171k is now worth US$209k.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Community West Bancshares

Community West Bancshares Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Independent Director Robert Bartlein bought US$105k worth of shares at a price of US$11.50 per share. Even though the purchase was made at a significantly lower price than the recent price (US$13.34), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

In the last twelve months insiders purchased 15.69k shares for US$171k. On the other hand they divested 7.00k shares, for US$99k. In the last twelve months there was more buying than selling by Community West Bancshares insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

NasdaqGM:CWBC Insider Trading Volume March 14th 2023

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).

Community West Bancshares Insiders Are Selling The Stock

Over the last three months, we've seen a bit of insider selling at Community West Bancshares. Independent Director & Secretary John Illgen sold just US$41k worth of shares in that time. Neither the lack of buying nor the presence of selling is heartening. But the volume sold is so low that it really doesn't bother us.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 26% of Community West Bancshares shares, worth about US$30m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Community West Bancshares Insider Transactions Indicate?

While there has not been any insider buying in the last three months, there has been selling. But the sales were small, so we're not concerned. However, our analysis of transactions over the last year is heartening. Insiders own shares in Community West Bancshares and we see no evidence to suggest they are worried about the future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Be aware that Community West Bancshares is showing 2 warning signs in our investment analysis, and 1 of those doesn't sit too well with us...

Of course Community West 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.

What are the risks and opportunities for Community West Bancshares?

Community West Bancshares operates as the bank holding company for Community West Bank, N.A.

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  • Trading at 46% below our estimate of its fair value

  • Earnings have grown 20.5% per year over the past 5 years


  • Earnings are forecast to decline by an average of 10.6% per year for the next 3 years

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