Some Live Oak Bancshares, Inc. (NYSE:LOB) shareholders may be a little concerned to see that the Chief Accounting Officer, John Sutherland, recently sold a substantial US$860k worth of stock at a price of US$43.00 per share. That's a big disposal, and it decreased their holding size by 43%, which is notable but not too bad.
Live Oak Bancshares Insider Transactions Over The Last Year
The Head of Commercial Banking, Steven Smits, made the biggest insider sale in the last 12 months. That single transaction was for US$897k worth of shares at a price of US$36.25 each. That means that even when the share price was below the current price of US$42.12, an insider wanted to cash in some shares. 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. 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 15% of Steven Smits's holding.
Live Oak Bancshares insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like Live Oak Bancshares better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Live Oak Bancshares insiders own 25% of the company, worth about US$470m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Live Oak Bancshares Insider Transactions Indicate?
An insider hasn't bought Live Oak Bancshares stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. But it is good to see that Live Oak Bancshares is growing earnings. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 1 warning sign for Live Oak Bancshares that deserve your attention before buying any shares.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.
