While it's been a great week for Customers Bancorp, Inc. (NYSE:CUBI) shareholders after stock gained 17%, they should consider it with a grain of salt. Although prices were relatively low, insiders chose to sell US$9.5m worth of stock in the past 12 months. This could be a sign of impending weakness.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Customers Bancorp Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Founder, Jay Sidhu, for US$4.1m worth of shares, at about US$41.47 per share. That means that even when the share price was below the current price of US$56.29, 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. We note that the biggest single sale was only 6.0% of Jay Sidhu's holding.

Insiders in Customers Bancorp didn't buy any shares in the last year. 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Does Customers Bancorp Boast High Insider Ownership?

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. It's great to see that Customers Bancorp insiders own 7.6% of the company, worth about US$136m. 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 Does This Data Suggest About Customers Bancorp Insiders?

It doesn't really mean much that no insider has traded Customers Bancorp shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Customers Bancorp insiders selling. Of course, the future is what matters most. So if you are interested in Customers Bancorp, you should check out this free report on analyst forecasts for the company.

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 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