Don't Ignore The Insider Selling In Metropolitan Bank Holding

We'd be surprised if Metropolitan Bank Holding Corp. (NYSE:MCB) shareholders haven't noticed that the Executive VP & Chief Lending Officer, Scott Lublin, recently sold US$176k worth of stock at US$58.77 per share. However, the silver lining is that the sale only reduced their total holding by 8.3%, so we're hesitant to read anything much into it, on its own.

View our latest analysis for Metropolitan Bank Holding

Metropolitan Bank Holding Insider Transactions Over The Last Year

The President, Mark DeFazio, made the biggest insider sale in the last 12 months. That single transaction was for US$5.1m worth of shares at a price of US$55.95 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$59.45. 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 47% of Mark DeFazio's holding.

In the last twelve months insiders purchased 2.73k shares for US$114k. But they sold 100.34k shares for US$5.5m. In total, Metropolitan Bank Holding insiders sold more than they bought over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership Of Metropolitan Bank Holding

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Metropolitan Bank Holding insiders own about US$31m worth of shares. That equates to 4.6% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Metropolitan Bank Holding Insider Transactions Indicate?

Unfortunately, there has been more insider selling of Metropolitan Bank Holding stock, than buying, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. But it is good to see that Metropolitan Bank Holding is growing earnings. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! While it's good to be aware of 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. While conducting our analysis, we found that Metropolitan Bank Holding has 1 warning sign and it would be unwise to ignore this.

But note: Metropolitan Bank Holding 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.