Despite a 16% gain in Stock Yards Bancorp, Inc.'s (NASDAQ:SYBT) stock price this week, shareholders shouldn't let up. Even though stock prices were relatively low, insiders elected to sell US$1.2m worth of stock in the last year, which could indicate some expected downturn.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Stock Yards Bancorp Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the CEO & Chairman of the Board, James Hillebrand, for US$284k worth of shares, at about US$51.14 per share. That means that even when the share price was below the current price of US$58.15, 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. This single sale was just 4.4% of James Hillebrand's stake.

Over the last year, we can see that insiders have bought 450.00 shares worth US$21k. But insiders sold 24.35k shares worth US$1.2m. All up, insiders sold more shares in Stock Yards Bancorp than they bought, over 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!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Stock Yards Bancorp Insiders Are Selling The Stock

The last three months saw significant insider selling at Stock Yards Bancorp. In total, Independent Director David Heintzman sold US$141k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership Of Stock Yards Bancorp

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Stock Yards Bancorp insiders own about US$138m worth of shares (which is 8.2% of the company). 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 Stock Yards Bancorp Insiders?

An insider hasn't bought Stock Yards Bancorp stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. It is good to see high insider ownership, but the insider selling leaves us cautious. Of course, the future is what matters most. So if you are interested in Stock Yards Bancorp, you should check out this free report on analyst forecasts for the company.

But note: Stock Yards Bancorp 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 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