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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NYSE:CBU
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We wouldn't blame Community Bank System, Inc. (NYSE:CBU) shareholders if they were a little worried about the fact that Sally Steele, the Independent Chair of the Board recently netted about US$670k selling shares at an average price of US$65.40. That sale reduced their total holding by 16% which is hardly insignificant, but far from the worst we've seen.

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Community Bank System Insider Transactions Over The Last Year

Notably, that recent sale by Sally Steele is the biggest insider sale of Community Bank System shares that we've seen in the last year. So what is clear is that an insider saw fit to sell at around the current price of US$62.93. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

In the last twelve months insiders purchased 775.00 shares for US$43k. But insiders sold 22.84k shares worth US$1.5m. Over the last year we saw more insider selling of Community Bank System shares, than buying. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NYSE:CBU Insider Trading Volume December 19th 2020

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

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 1.3% of Community Bank System shares, worth about US$45m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

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

The stark truth for Community Bank System is that there has been more insider selling than insider buying in the last three months. Zooming out, the longer term picture doesn't give us much comfort. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Community Bank System.

But note: Community Bank System 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, but not derivative transactions.

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What are the risks and opportunities for Community Bank System?

Community Bank System, Inc. operates as the bank holding company for Community Bank, N.A.

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Rewards

  • Trading at 16% below our estimate of its fair value

  • Earnings are forecast to grow 3.9% per year

Risks

No risks detected for CBU from our risks checks.

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Community Bank System

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