New York Community Bancorp Insiders Sell US$1.7m Of Stock, Possibly Signalling Caution

In the last year, many New York Community Bancorp, Inc. (NYSE:NYCB) insiders sold a substantial stake in the company which may have sparked shareholders' attention. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for New York Community Bancorp

New York Community Bancorp Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Independent Director, Ronald Rosenfeld, for US$1.2m worth of shares, at about US$8.74 per share. That means that even when the share price was below the current price of US$9.74, 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. 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. We note that the biggest single sale was 71% of Ronald Rosenfeld's holding.

In total, New York Community Bancorp insiders sold more than they bought over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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Insiders At New York Community Bancorp Have Sold Stock Recently

The last three months saw significant insider selling at New York Community Bancorp. Specifically, Senior Executive VP & President of Consumer and Corporate Banking Reginald Davis ditched US$108k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership Of New York Community Bancorp

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. New York Community Bancorp insiders own about US$134m worth of shares (which is 1.9% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About New York Community Bancorp Insiders?

An insider hasn't bought New York Community Bancorp stock in the last three months, but there was some selling. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But since New York Community Bancorp is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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. For example, New York Community Bancorp has 4 warning signs (and 1 which shouldn't be ignored) we think you should know about.

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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 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.