Trade Alert: The Independent Director Of Coastal Financial Corporation (NASDAQ:CCB), Thomas Lane, Has Just Spent US$54k Buying 1.0% More Shares

[view original post]

Whilst it may not be a huge deal, we thought it was good to see that the Coastal Financial Corporation (NASDAQ:CCB) Independent Director, Thomas Lane, recently bought US$54k worth of stock, for US$41.81 per share. Although the purchase is not a big one, increasing their shareholding by only 1.0%, it can be interpreted as a good sign.

See our latest analysis for Coastal Financial

The Last 12 Months Of Insider Transactions At Coastal Financial

The Vice Chairman Andrew Skotdal made the biggest insider purchase in the last 12 months. That single transaction was for US$1m worth of shares at a price of US$40.50 each. That means that an insider was happy to buy shares at above the current price of US$40.20. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. To us, it’s very important to consider the price insiders pay for shares. 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.

Happily, we note that in the last year insiders paid US$1.4m for 34.68k shares. On the other hand they divested 15.90k shares, for US$497k. In the last twelve months there was more buying than selling by Coastal Financial insiders. 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!

insider-trading-volume

Coastal Financial 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.

Insider Ownership of Coastal Financial

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. We usually like to see fairly high levels of insider ownership. Coastal Financial insiders own about US$93m worth of shares. That equates to 18% 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 Coastal Financial Tell Us?

It’s certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. Given that insiders also own a fair bit of Coastal Financial we think they are probably pretty confident of a bright future. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. Every company has risks, and we’ve spotted 1 warning sign for Coastal Financial you should know about.

But note: Coastal Financial 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.