We wouldn't blame Community Trust Bancorp, Inc. (NASDAQ:CTBI) shareholders if they were a little worried about the fact that David Jones, the Executive Vice President recently netted about US$546k selling shares at an average price of US$49.41. That's a big disposal, and it decreased their holding size by 32%, which is notable but not too bad.
The Last 12 Months Of Insider Transactions At Community Trust Bancorp
In fact, the recent sale by David Jones was the biggest sale of Community Trust Bancorp shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was below the current price of US$50.67, 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. 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. This single sale was just 32% of David Jones's stake.
Happily, we note that in the last year insiders paid US$1.5m for 41.90k shares. But insiders sold 26.06k shares worth US$1.2m. In total, Community Trust Bancorp insiders bought more than they sold over the last year. They paid about US$36.14 on average. It is certainly positive to see that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insider Ownership Of Community Trust Bancorp
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Community Trust Bancorp insiders own 4.2% of the company, worth about US$38m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Community Trust Bancorp Tell Us?
The stark truth for Community Trust Bancorp is that there has been more insider selling than insider buying in the last three months. In contrast, they appear keener if you look at the last twelve months. We like that insiders own a fair amount of the company. So the recent selling doesn't worry us too much. 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 Community Trust Bancorp has 1 warning sign and it would be unwise to ignore this.
But note: Community Trust Bancorp 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com