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We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So we’ll take a look at whether insiders have been buying or selling shares in Community West Bancshares (NASDAQ:CWBC).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. 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 Community West Bancshares
Over the last year, we can see that the biggest insider sale was by the Chairman of the Board, William Peeples, for US$330k worth of shares, at about US$12.30 per share. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. It’s of some comfort that this sale was conducted at a price well above the current share price, which is US$9.95. So it may not tell us anything about how insiders feel about the current share price.
In the last twelve months insiders purchased 6950 shares for US$71k. But they sold 84335 for US$947k. In total, Community West Bancshares insiders sold more than they bought over the last year. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Community West Bancshares Insiders Bought Stock Recently
We saw some Community West Bancshares insider buying shares in the last three months. Insiders purchased US$45k worth of shares in that period. It’s good to see the insider buying, as well as the lack of recent sellers. However, in this case the amount invested recently is quite small.
Does Community West 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. We usually like to see fairly high levels of insider ownership. Community West Bancshares insiders own about US$21m worth of shares. That equates to 25% of the company. 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?
We note a that there has been a bit of insider buying recently (but no selling). Overall the buying isn’t worth writing home about. Our analysis of Community West Bancshares insider transactions leaves us cautious. But it’s good to see that insiders own shares in the company. Along with insider transactions, I recommend checking if Community West Bancshares is growing revenue. This free chart of historic revenue and earnings should make that easy.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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If you spot an error that warrants correction, please contact the editor at email@example.com. 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.