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It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we’ll take a look at whether insiders have been buying or selling shares in Seacoast Banking Corporation of Florida (NASDAQ:SBCF).
Do Insider Transactions Matter?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
The Last 12 Months Of Insider Transactions At Seacoast Banking of Florida
Roger Goldman made the biggest insider sale in the last 12 months. That single transaction was for US$197k worth of shares at a price of US$27.40 each. That means that even when the share price was below the current price of US$28.99, an insider wanted to cash in some shares. While their view may have changed since they sold, this isn’t a particularly bullish sign. We generally consider it a negative if insiders have been selling on market, especially if they did so below the current price. We note that the biggest single sale was only 22.1% of Roger Goldman’s holding.
In the last twelve months insiders netted US$550k for 19.40k shares sold. In total, Seacoast Banking of Florida insiders sold more than they bought over the last year. The average sell price was around US$28.35. It’s not particularly great to see insiders were selling shares around current prices. But we don’t put too much weight on the insider selling, since sellers could have personal reasons. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Seacoast Banking of Florida Insiders Are Selling The Stock
The last three months saw significant insider selling at Seacoast Banking of Florida. In total, Executive VP Charles Shaffer dumped US$121k worth of shares in that time, and we didn’t record any purchases whatsoever. Overall this makes us a bit cautious, but it’s not the be all and end all.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Insiders own 1.8% of Seacoast Banking of Florida shares, worth about US$27m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Seacoast Banking of Florida Tell Us?
An insider sold Seacoast Banking of Florida shares recently, but they didn’t buy any. Looking to the last twelve months, our data doesn’t show any insider buying. But since Seacoast Banking of Florida is profitable and growing, we’re not too worried by this. While insiders do own shares, they don’t own a heap, and they have been selling. We’re in no rush to buy! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Seacoast Banking of Florida.
But note: Seacoast Banking of Florida 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.