Stock Analysis

This Insider Has Just Sold Shares In Byline Bancorp, Inc. (NYSE:BY)

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Anyone interested in Byline Bancorp, Inc. (NYSE:BY) should probably be aware that the Director, Robert Yohanan, recently divested US$417k worth of shares in the company, at an average price of US$20.83 each. However, the silver lining is that the sale only reduced their total holding by 4.1%, so we're hesitant to read anything much into it, on its own.

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Byline Bancorp Insider Transactions Over The Last Year

Notably, that recent sale by Robert Yohanan is the biggest insider sale of Byline Bancorp shares that we've seen in the last year. So it's clear an insider wanted to take some cash off the table, even below the current price of US$21.65. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 4.1% of Robert Yohanan's stake.

In the last twelve months insiders purchased 14.98k shares for US$222k. But they sold 38.78k shares for US$672k. All up, insiders sold more shares in Byline 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. By clicking on the graph below, you can see the precise details of each insider transaction!

NYSE:BY Insider Trading Volume March 9th 2021

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

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Byline Bancorp insiders own 39% of the company, currently worth about US$328m based on the recent share price. 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 Do The Byline Bancorp Insider Transactions Indicate?

The insider sales have outweighed the insider buying, at Byline Bancorp, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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 Byline Bancorp and understanding this should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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, but not derivative transactions.

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