Phillip Green, Chairman of the Board and CEO, made the largest insider purchase in the recent 12 months. That single transaction involved US$1.0 million worth of shares at a price of US$107 per. That suggests an insider was willing to pay more for shares than the current market price of US$104. While their opinion may have shifted after the purchase, it does show that they had faith in the company’s future. We believe it is critical to evaluate the price insiders pay for shares. It is often more positive if they paid more than the current price, as this indicates they spotted value at higher levels.
While Cullen/Frost Bankers insiders purchased shares last year, they did not sell. The following graph depicts insider transactions (by corporations and individuals) over the previous 12 months. Simply click on the graph below to see who sold, how much, and when!
It is worthwhile for a common shareholder to inquire about the number of shares held by corporate insiders. When there is a significant level of insider ownership, firm leadership is more likely to consider shareholder interests. Cullen/Frost Bankers insiders hold around US$207 million in stock (3.1% of the firm). Significant insider ownership increases the likelihood that the firm will be operated in the best interests of all shareholders.
It doesn’t mean much that no insiders traded Cullen/Frost Bankers stock in the recent quarter. On a brighter side, trades during the last year have been encouraging. It would be fantastic to see more insider buying, but generally, it appears that Cullen/Frost Bankers insiders are reasonably aligned (holding a sizable portion of the company’s shares) and confident about the future. So, while it’s useful to know what insiders are buying and selling, it’s also useful to understand the dangers that a certain firm faces. For example, Cullen/Frost Bankers has one warning indicator we believe you should be aware of.