Despite low prices, MetroCity Bankshares, Inc. (NASDAQ:MCBS) insiders sold US$3.2m worth of shares last year probably anticipating weakness

By
Simply Wall St
Published
November 30, 2021
NasdaqGS:MCBS
Source: Shutterstock

Even though MetroCity Bankshares, Inc. (NASDAQ:MCBS) has fallen by 7.2% over the past week , insiders who sold US$3.2m worth of stock over the past year have had less luck. The average selling price of US$14.70 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for MetroCity Bankshares

MetroCity Bankshares Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Chairman & CEO, Nack Paek, for US$609k worth of shares, at about US$14.36 per share. That means that even when the share price was below the current price of US$26.90, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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. We note that the biggest single sale was only 3.2% of Nack Paek's holding.

MetroCity Bankshares insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by companies and 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!

insider-trading-volume
NasdaqGS:MCBS Insider Trading Volume December 1st 2021

I will like MetroCity Bankshares better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Does MetroCity Bankshares 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. I reckon it's a good sign if insiders own a significant number of shares in the company. MetroCity Bankshares insiders own about US$183m 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 MetroCity Bankshares Insider Transactions Indicate?

It doesn't really mean much that no insider has traded MetroCity Bankshares shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the MetroCity Bankshares insiders selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing MetroCity Bankshares. Every company has risks, and we've spotted 2 warning signs for MetroCity Bankshares you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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