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 shareholders might well want to know whether insiders have been buying or selling shares in TowneBank (NASDAQ:TOWN).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. 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.’
TowneBank Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the , Robert Hatley, sold US$1.8m worth of shares at a price of US$32.45 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It’s of some comfort that this sale was conducted at a price well above the current share price, which is US$25.94. So it is hard to draw any strong conclusion from it.
Happily, we note that in the last year insiders paid US$2.4m for 90871 shares. But they sold 147k for US$4.6m. In total, TowneBank insiders sold more than they bought over the last year. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders at TowneBank Have Bought Stock Recently
There has been significantly more insider buying, than selling, at TowneBank, over the last three months. 10 insiders bought US$1.9m worth of shares. But insiders only sold shares worth US$248k. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.
Does TowneBank Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. TowneBank insiders own about US$211m worth of shares (which is 11% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At TowneBank Tell Us?
It is good to see recent purchasing. However, the longer term transactions are not so encouraging. Overall, we’d prefer see a more sustained buying from directors, but with a significant insider holding and more recent purchases, TowneBank insiders are reasonably well aligned, and optimistic for the future. Of course, the future is what matters most. So if you are interested in TowneBank, you should check out this free report on analyst forecasts for the company.
But note: TowneBank 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.
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