Live Oak Bancshares, Inc. (NASDAQ:LOB) is up 4.9%, while insiders who purchased US$6.4m are up 110%
Insiders who bought Live Oak Bancshares, Inc. (NASDAQ:LOB) stock in the last 12 months were richly rewarded last week. The company's market value increased by US$149m as a result of the stock's 4.9% gain over the same period. Put another way, the original US$6.4m acquisition is now worth US$13m.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for Live Oak Bancshares
Live Oak Bancshares Insider Transactions Over The Last Year
The Chairman & CEO James Mahan made the biggest insider purchase in the last 12 months. That single transaction was for US$5.3m worth of shares at a price of US$34.90 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$73.24. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
Happily, we note that in the last year insiders paid US$6.4m for 182.08k shares. But insiders sold 108.63k shares worth US$6.3m. Overall, Live Oak Bancshares insiders were net buyers during the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Live Oak Bancshares is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Live Oak Bancshares Insiders Are Selling The Stock
We've seen more insider selling than insider buying at Live Oak Bancshares recently. In that time, insiders dumped US$5.5m worth of shares. Meanwhile Chief Financial Officer William Losch bought US$200k worth. Generally this level of net selling might be considered a bit bearish.
Insider Ownership of Live Oak Bancshares
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. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Live Oak Bancshares insiders own 26% of the company, worth about US$810m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Live Oak Bancshares Tell Us?
The stark truth for Live Oak Bancshares is that there has been more insider selling than insider buying in the last three months. But we take heart from prior transactions. We are also comforted by the high levels of insider ownership. So we're not too bothered by recent selling. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 4 warning signs for Live Oak Bancshares you should be aware of, and 2 of them are potentially serious.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, but not derivative transactions.
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.
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