Stock Yards Bancorp Insiders Sold US$3.6m Of Shares Suggesting Hesitancy

The fact that multiple Stock Yards Bancorp, Inc. (NASDAQ:SYBT) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Stock Yards Bancorp

Stock Yards Bancorp Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Independent Director, David Heintzman, for US$731k worth of shares, at about US$73.08 per share. That means that an insider was selling shares at slightly below the current price (US$75.39). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 8.5% of David Heintzman's holding.

Happily, we note that in the last year insiders paid US$46k for 850.00 shares. On the other hand they divested 52.93k shares, for US$3.6m. All up, insiders sold more shares in Stock Yards Bancorp than they bought, over the last year. You can see the insider transactions (by companies and individuals) 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!

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Insiders At Stock Yards Bancorp Have Sold Stock Recently

The last quarter saw substantial insider selling of Stock Yards Bancorp shares. Specifically, insiders ditched US$460k 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.

Insider Ownership

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. Stock Yards Bancorp insiders own about US$52m worth of shares. That equates to 2.3% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Stock Yards Bancorp Insider Transactions Indicate?

Insiders sold Stock Yards Bancorp shares recently, but they didn't buy any. 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. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Stock Yards Bancorp. For example - Stock Yards Bancorp has 1 warning sign we think you should be aware of.

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.

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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.