Trade Alert: Executive VP & Head of Institutional Banking Of Bancorp John Leto Has Sold Stock

We wouldn't blame The Bancorp, Inc. (NASDAQ:TBBK) shareholders if they were a little worried about the fact that John Leto, the Executive VP & Head of Institutional Banking recently netted about US$2.9m selling shares at an average price of US$57.51. That's a big disposal, and it decreased their holding size by 33%, which is notable but not too bad.

View our latest analysis for Bancorp

Bancorp Insider Transactions Over The Last Year

Notably, that recent sale by John Leto is the biggest insider sale of Bancorp shares that we've seen in the last year. That means that an insider was selling shares at around the current price of US$55.17. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

Happily, we note that in the last year insiders paid US$2.6m for 67.91k shares. On the other hand they divested 112.51k shares, for US$5.6m. In total, Bancorp insiders sold more than they bought over the last year. The average sell price was around US$50.07. We don't gain confidence from insider selling below the recent share price. Of course, the sales could be motivated for a multitude of reasons, so we shouldn't jump to conclusions. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Bancorp better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Bancorp insiders own about US$125m worth of shares (which is 4.7% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Bancorp Tell Us?

Unfortunately, there has been more insider selling of Bancorp stock, than buying, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. But it is good to see that Bancorp is growing earnings. 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. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. While conducting our analysis, we found that Bancorp has 1 warning sign and it would be unwise to ignore it.

But note: 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.