Did International Bancshares Corporation (NASDAQ:IBOC) Insiders Sell Shares?

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 we'll take a look at whether insiders have been buying or selling shares in International Bancshares Corporation (NASDAQ:IBOC).

What Is Insider Buying?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. 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'.

View our latest analysis for International Bancshares

International Bancshares Insider Transactions Over The Last Year

The Director, Antonio Sanchez, made the biggest insider sale in the last 12 months. That single transaction was for US$6.6m worth of shares at a price of US$31.14 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$37.76. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 4.6% of Antonio Sanchez's stake. The only individual insider seller over the last year was Antonio Sanchez.

Over the last year, we can see that insiders have bought 9.14k shares worth US$256k. On the other hand they divested 212.00k shares, for US$6.6m. You can see the insider transactions (by companies and 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 like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. International Bancshares insiders own about US$249m worth of shares (which is 10% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About International Bancshares Insiders?

It doesn't really mean much that no insider has traded International Bancshares shares in the last quarter. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of International Bancshares insider transactions don't fill us with confidence. 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. You'd be interested to know, that we found 1 warning sign for International Bancshares and we suggest you have a look.

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.

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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