Don't Ignore The Fact That This Insider Just Sold Some Shares In MetroCity Bankshares, Inc. (NASDAQ:MCBS)

We'd be surprised if MetroCity Bankshares, Inc. (NASDAQ:MCBS) shareholders haven't noticed that the Independent Director, Don Leung, recently sold US$450k worth of stock at US$15.00 per share. However, the silver lining is that the sale only reduced their total holding by 2.6%, so we're hesitant to read anything much into it, on its own.

See our latest analysis for MetroCity Bankshares

The Last 12 Months Of Insider Transactions At MetroCity Bankshares

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$15.18, 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. This single sale was just 3.2% of Nack Paek's stake.

MetroCity Bankshares insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Insider Ownership of MetroCity Bankshares

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that MetroCity Bankshares insiders own 34% of the company, worth about US$131m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At MetroCity Bankshares Tell Us?

Insiders sold MetroCity Bankshares shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 2 warning signs for MetroCity Bankshares and we suggest you have a look.

Of course MetroCity Bankshares 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.

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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