It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in Spirit of Texas Bancshares, Inc. (NASDAQ:STXB).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
Spirit of Texas Bancshares Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Director Robert Beall for US$231k worth of shares, at about US$21.00 per share. That implies that an insider found the current (approximate) price enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. We generally consider it a positive if insiders have been buying on market, even if the share price has increased a bit since then.
In the last twelve months insiders paid US$599k for 29.37k shares purchased. In the last twelve months there was more buying than selling by Spirit of Texas Bancshares insiders. Their average price was about US$20.40. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price of US$22.18. You can see a visual depiction of insider transactions 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!
Spirit of Texas Bancshares is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Spirit of Texas Bancshares Insiders Bought Stock Recently
There was some insider buying at Spirit of Texas Bancshares over the last quarter. Director Thomas Sooy purchased US$18k worth of shares in that period. It’s great to see that insiders are only buying, not selling. However, in this case the amount invested recently is quite small.
Insider Ownership of Spirit of Texas Bancshares
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It’s good to see that Spirit of Texas Bancshares insiders own 15% of the company, worth about US$40m. 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 Spirit of Texas Bancshares Insider Transactions Indicate?
Insider purchases have outweighed sales, in the last three months. But overall the difference isn’t worth writing home about. On a brighter note, the transactions over the last year are encouraging. Overall we don’t see anything to make us think Spirit of Texas Bancshares insiders are doubting the company, and they do own shares. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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 firstname.lastname@example.org.