Stock Analysis

This Insider Has Just Sold Shares In Live Oak Bancshares, Inc. (NASDAQ:LOB)

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NYSE:LOB
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Some Live Oak Bancshares, Inc. (NASDAQ:LOB) shareholders may be a little concerned to see that the Chief Credit Officer, Steven Smits, recently sold a substantial US$651k worth of stock at a price of US$43.40 per share. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 9.0%.

See our latest analysis for Live Oak Bancshares

Live Oak Bancshares Insider Transactions Over The Last Year

The Chairman & CEO James Mahan made the biggest insider purchase in the last 12 months. That single transaction was for US$5.3m worth of shares at a price of US$34.90 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$45.54. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Happily, we note that in the last year insiders paid US$12m for 538.06k shares. But insiders sold 18.50k shares worth US$791k. In the last twelve months there was more buying than selling by Live Oak Bancshares insiders. Their average price was about US$22.79. To my mind it is good that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. 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!

insider-trading-volume
NasdaqGS:LOB Insider Trading Volume February 12th 2021

Live Oak Bancshares is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Live Oak Bancshares Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Live Oak Bancshares insiders own about US$513m worth of shares (which is 27% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Live Oak Bancshares Insider Transactions Indicate?

Insiders haven't bought Live Oak Bancshares stock in the last three months, but there was some selling. On the other hand, the insider transactions over the last year are encouraging. We are also comforted by the high levels of insider ownership. So the recent selling doesn't worry us. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Live Oak Bancshares. You'd be interested to know, that we found 2 warning signs for Live Oak Bancshares and we suggest you have a look.

But note: Live Oak Bancshares may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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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