Stock Analysis

Don't Ignore The Fact That This Insider Just Sold Some Shares In Community Bank System, Inc. (NYSE:CBU)

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We'd be surprised if Community Bank System, Inc. (NYSE:CBU) shareholders haven't noticed that the Independent Director, Eric Stickels, recently sold US$424k worth of stock at US$70.70 per share. The eyebrow raising move amounted to a reduction of 13% in their holding.

Check out our latest analysis for Community Bank System

The Last 12 Months Of Insider Transactions At Community Bank System

The Independent Chair of the Board, Sally Steele, made the biggest insider sale in the last 12 months. That single transaction was for US$670k worth of shares at a price of US$65.40 each. That means that even when the share price was below the current price of US$70.05, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 16% of Sally Steele's stake.

Over the last year, we can see that insiders have bought 1.06k shares worth US$60k. On the other hand they divested 32.04k shares, for US$2.1m. All up, insiders sold more shares in Community Bank System 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!

NYSE:CBU Insider Trading Volume February 13th 2021

I will like Community Bank System better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership of Community Bank System

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. It appears that Community Bank System insiders own 1.3% of the company, worth about US$50m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Community Bank System Insiders?

The insider sales have outweighed the insider buying, at Community Bank System, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, Community Bank System has 3 warning signs (and 1 which shouldn't be ignored) we think you should know about.

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, but not derivative transactions.

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