Possible Bearish Signals With Customers Bancorp Insiders Disposing Stock

In the last year, many Customers Bancorp, Inc. (NYSE:CUBI) insiders sold a substantial stake in the company which may have sparked shareholders' attention. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, if numerous insiders are selling, shareholders should investigate more.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Customers Bancorp

The Last 12 Months Of Insider Transactions At Customers Bancorp

In the last twelve months, the biggest single sale by an insider was when the Founder, Jay Sidhu, sold US$4.1m worth of shares at a price of US$41.47 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$46.98. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 6.0% of Jay Sidhu's stake.

In total, Customers Bancorp insiders sold more than they bought over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Insiders At Customers Bancorp Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Customers Bancorp. President & Vice Chairman Samvir Sidhu spent US$114k on stock, and there wasn't any selling. This makes one think the business has some good points.

Does Customers Bancorp 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. We usually like to see fairly high levels of insider ownership. It's great to see that Customers Bancorp insiders own 7.7% of the company, worth about US$108m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Customers Bancorp Insider Transactions Indicate?

The recent insider purchase is heartening. But we can't say the same for the transactions over the last 12 months. The recent buying by an insider , along with high insider ownership, suggest that Customers Bancorp insiders are fairly aligned, and optimistic. Of course, the future is what matters most. So if you are interested in Customers Bancorp, you should check out this free report on analyst forecasts for the company.

But note: Customers Bancorp 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 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.