Don't Ignore The Insider Selling In Bank OZK

We'd be surprised if Bank OZK (NASDAQ:OZK) shareholders haven't noticed that the Chief Financial Officer, Tim Hicks, recently sold US$440k worth of stock at US$43.97 per share. That sale was 10% of their holding, so it does make us raise an eyebrow.

See our latest analysis for Bank OZK

Bank OZK Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Independent Director, Ross Whipple, for US$5.2m worth of shares, at about US$51.50 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$43.56). So it is hard to draw any strong conclusion from it.

In total, Bank OZK insiders sold more than they bought over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It's great to see that Bank OZK insiders own 6.5% of the company, worth about US$323m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Bank OZK Tell Us?

Insiders sold stock recently, but they haven't been buying. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But since Bank OZK is profitable and growing, we're not too worried by this. 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. While conducting our analysis, we found that Bank OZK has 1 warning sign and it would be unwise to ignore this.

But note: Bank OZK 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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.