Some Home Bancshares, Inc. (Conway, AR) (NYSE:HOMB) shareholders may be a little concerned to see that the President & Chief Lending Officer, Kevin Hester, recently sold a substantial US$682k worth of stock at a price of US$27.00 per share. However, that sale only accounted for 9.2% of their holding, so arguably it doesn't say much about their conviction.
Home Bancshares (Conway AR) Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the insider, James Hickman, for US$2.5m worth of shares, at about US$25.43 per share. That means that even when the share price was below the current price of US$28.07, 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 20% of James Hickman's holding.
Happily, we note that in the last year insiders paid US$554k for 25.00k shares. But they sold 156.30k shares for US$3.9m. In total, Home Bancshares (Conway AR) insiders sold more than they bought over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, 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).
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. Home Bancshares (Conway AR) insiders own 7.0% of the company, currently worth about US$388m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About Home Bancshares (Conway AR) Insiders?
Insiders sold stock recently, but they haven't been buying. And our longer term analysis of insider transactions didn't bring confidence, either. But it is good to see that Home Bancshares (Conway AR) is growing earnings. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. 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 Home Bancshares (Conway AR) has 1 warning sign and it would be unwise to ignore it.
Of course Home Bancshares (Conway AR) may not be the best stock to buy. So you may wish to see this free collection of high quality 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
