Insiders sold US$103m worth of FB Financial Corporation (NYSE:FBK) stock last year, could be a warning sign to watch out for

While it’s been a great week for FB Financial Corporation (NYSE:FBK) shareholders after stock gained 3.9%, they should consider it with a grain of salt. Even though stock prices were relatively low, insiders elected to sell US$103m worth of stock in the last year, which could indicate some expected downturn.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for FB Financial

The Last 12 Months Of Insider Transactions At FB Financial

Over the last year, we can see that the biggest insider sale was by the insider, James Ayers, for US$102m worth of shares, at about US$40.84 per share. That means that even when the share price was below the current price of US$44.29, an insider wanted to cash in some shares. 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. It is worth noting that this sale was only 18% of James Ayers's holding.

FB Financial insiders didn't buy any shares 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!

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Does FB Financial 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. 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 FB Financial insiders own 24% of the company, worth about US$506m. 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 FB Financial Insider Transactions Indicate?

It doesn't really mean much that no insider has traded FB Financial shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the FB Financial insiders selling. 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. At Simply Wall St, we found 1 warning sign for FB Financial that deserve your attention before buying any shares.

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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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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.