Insiders At Stock Yards Bancorp Sold US$1.1m In Stock, Alluding To Potential Weakness

Stock Yards Bancorp, Inc. (NASDAQ:SYBT) shareholders might have a reason to worry after multiple insiders sold their shares over the last year. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Stock Yards Bancorp

Stock Yards Bancorp Insider Transactions Over The Last Year

The CEO & Chairman of the Board, James Hillebrand, made the biggest insider sale in the last 12 months. That single transaction was for US$284k worth of shares at a price of US$51.14 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$43.94. So it may not shed much light on insider confidence at current levels.

Happily, we note that in the last year insiders paid US$100k for 2.09k shares. On the other hand they divested 23.35k shares, for US$1.1m. All up, insiders sold more shares in Stock Yards Bancorp than they bought, over the last year. You can see a visual depiction of insider transactions (by companies and 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.

Stock Yards Bancorp Insiders Are Selling The Stock

There was substantially more insider selling, than buying, of Stock Yards Bancorp shares over the last three months. In that time, Independent Director David Heintzman dumped US$144k worth of shares. On the other hand we note Independent Director Shannon Arvin bought US$9.2k worth of shares. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the shares are not cheap.

Insider Ownership Of Stock Yards Bancorp

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Stock Yards Bancorp insiders own about US$106m worth of shares (which is 8.2% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Stock Yards Bancorp Insiders?

The stark truth for Stock Yards Bancorp is that there has been more insider selling than insider buying in the last three months. Zooming out, the longer term picture doesn't give us much comfort. But since Stock Yards Bancorp 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. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we've identified 1 warning sign with Stock Yards Bancorp and understanding it should be part of your investment process.

But note: Stock Yards Bancorp 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.