Insiders At UMB Financial Sold US$27m In Stock, Alluding To Potential Weakness

The fact that multiple UMB Financial Corporation (NASDAQ:UMBF) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for UMB Financial

UMB Financial Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Chairman & CEO, J. Kemper, sold US$3.0m worth of shares at a price of US$125 per share. So we know that an insider sold shares at around the present share price of US$116. While we don't usually like to see insider selling, it's more concerning if the sales take place 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.

Over the last year, we can see that insiders have bought 1.90k shares worth US$184k. On the other hand they divested 280.33k shares, for US$27m. All up, insiders sold more shares in UMB Financial 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 want to know exactly who sold, for how much, and when, simply click on the graph below!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insiders At UMB Financial Have Sold Stock Recently

Over the last three months, we've seen notably more insider selling, than insider buying, at UMB Financial. In that time, insiders dumped US$9.8m worth of shares. On the other hand we note insiders bought US$48k worth of shares. Generally this level of net selling might be considered a bit bearish.

Insider Ownership Of UMB Financial

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that UMB Financial insiders own 4.4% of the company, worth about US$248m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About UMB Financial Insiders?

The insider sales have outweighed the insider buying, at UMB Financial, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. On the plus side, UMB Financial makes money, and is growing profits. 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 it's good to be aware of 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. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of UMB Financial.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.