Don't Ignore The Fact That This Insider Just Sold Some Shares In First Republic Bank (NYSE:FRC)

Some First Republic Bank (NYSE:FRC) shareholders may be a little concerned to see that the Founder, James Herbert, recently sold a substantial US$3.0m worth of stock at a price of US$197 per share. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 1.7%.

See our latest analysis for First Republic Bank

First Republic Bank Insider Transactions Over The Last Year

Notably, that recent sale by Founder James Herbert was not the only time they sold First Republic Bank shares this year. Earlier in the year, they fetched US$185 per share in a -US$4.6m sale. That means that even when the share price was below the current price of US$204, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 2.9% of James Herbert's stake.

Insiders in First Republic Bank didn't buy any shares in 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 First Republic Bank Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. First Republic Bank insiders own about US$274m worth of shares (which is 0.8% of the company). 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 First Republic Bank Insider Transactions Indicate?

Insiders sold First Republic Bank shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. On the plus side, First Republic Bank makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. While conducting our analysis, we found that First Republic Bank has 2 warning signs and it would be unwise to ignore them.

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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. 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.
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