Investors who take an interest in Cadence Bancorporation (NYSE:CADE) should definitely note that the Chairman & CEO, Paul Murphy, recently paid US$8.15 per share to buy US$122k worth of the stock. While that's a very decent purchase to our minds, it was proportionally a bit modest, boosting their holding by just 4.7%.
The Last 12 Months Of Insider Transactions At Cadence Bancorporation
Over the last year, we can see that the biggest insider purchase was by Independent Lead Director William Harrison for US$997k worth of shares, at about US$15.53 per share. That means that an insider was happy to buy shares at above the current price of US$8.47. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months Cadence Bancorporation insiders were buying shares, but not selling. The average buy price was around US$11.43. These transactions suggest that insiders have considered the current price attractive. 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!
Cadence Bancorporation is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Cadence Bancorporation insiders own about US$33m worth of shares. That equates to 3.1% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Cadence Bancorporation Tell Us?
It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Given that insiders also own a fair bit of Cadence Bancorporation we think they are probably pretty confident of a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Cadence Bancorporation. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Cadence Bancorporation.
But note: Cadence Bancorporation 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, but not derivative transactions.
This article by Simply Wall St is general in nature. 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.
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