We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell SVB Financial Group (NASDAQ:SIVB), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Colombia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
SVB Financial Group Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by Christopher Edmonds-Waters for US$739k worth of shares, at about US$319 per share. So what is clear is that an insider saw fit to sell at around the current price of US$240. While their view may have changed since the sale, this is not a particularly positive fact. Arguably, insider selling at current prices should give us reason to reflect on whether the stock is fully valued at the moment.
In the last twelve months insiders netted US$2.4m for 8.14k shares sold. All up, insiders sold more shares in SVB Financial Group than they bought, over the last year. The sellers received a price of around US$300, on average. We don’t gain much confidence from insider selling near the recent share price of US$240. While some insiders have decided to take some money off the table, we wouldn’t put too much weight on this fact. You can see the insider transactions over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
SVB Financial Group Insiders Are Selling The Stock
The last three months saw significant insider selling at SVB Financial Group. In total, Philip Cox dumped US$148k worth of shares in that time, and we didn’t record any purchases whatsoever. In light of this it’s hard to argue that all the directors think that the shares are a bargain.
Insider Ownership of SVB Financial Group
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. SVB Financial Group insiders own about US$67m worth of shares. That equates to 0.5% of the company. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The SVB Financial Group Insider Transactions Indicate?
An insider haven’t bought SVB Financial Group stock in the last three months, but they sure did sell some. And even if we look to the last year, we didn’t see any purchases. But since SVB Financial Group is profitable and growing, we’re not too worried by this. When you consider that most companies have higher levels of insider ownership, we’re a little wary. We’d certainly think twice before buying! Of course, the future is what matters most. So if you are interested in SVB Financial Group, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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 email@example.com.