When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Texas Capital Bancshares, Inc.'s (NASDAQ:TCBI) instance, it's good news for shareholders.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
Texas Capital Bancshares Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Chairman Robert Stallings bought US$498k worth of shares at a price of US$55.48 per share. So it's clear an insider wanted to buy, at around the current price, which is US$59.46. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. In this case we're pleased to report that the insider purchases were made at close to current prices. We note that Robert Stallings was both the biggest buyer and the biggest seller.
In the last twelve months insiders purchased 43.00k shares for US$2.4m. But insiders sold 7.00k shares worth US$379k. In the last twelve months there was more buying than selling by Texas Capital Bancshares insiders. 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!
Texas Capital Bancshares is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Texas Capital Bancshares Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at Texas Capital Bancshares. Independent Director Thomas Long spent US$118k on stock, and there wasn't any selling. This is a positive in our book as it implies some confidence.
Does Texas Capital Bancshares 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. We usually like to see fairly high levels of insider ownership. Texas Capital Bancshares insiders own about US$38m worth of shares. That equates to 1.4% 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 Texas Capital Bancshares Insider Transactions Indicate?
It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. Insiders likely see value in Texas Capital Bancshares shares, given these transactions (along with notable insider ownership of 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. While conducting our analysis, we found that Texas Capital Bancshares has 1 warning sign and it would be unwise to ignore it.
Of course Texas Capital Bancshares may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.