Looking at Live Oak Bancshares, Inc.'s (NYSE:LOB ) insider transactions over the last year, we can see that insiders were net sellers. That is, there were more number of shares sold by insiders than there were purchased.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for Live Oak Bancshares
Live Oak Bancshares Insider Transactions Over The Last Year
In fact, the recent sale by Renato Derraik was the biggest sale of Live Oak Bancshares shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at slightly below the current price (US$33.25). 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 61% of Renato Derraik's holding.
Happily, we note that in the last year insiders paid US$228k for 10.00k shares. But they sold 20.00k shares for US$591k. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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Live Oak Bancshares Insiders Are Selling The Stock
Over the last three months, we've seen significant insider selling at Live Oak Bancshares. In total, Chief Information & Digital Officer of Bank Renato Derraik dumped US$591k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
Insider Ownership
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Live Oak Bancshares insiders own 25% of the company, currently worth about US$333m based on the recent share price. 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 Do The Live Oak Bancshares Insider Transactions Indicate?
An insider sold stock recently, but they haven't been buying. And our longer term analysis of insider transactions didn't bring confidence, either. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. 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. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Live Oak Bancshares.
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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.