Don't Ignore The Insider Selling In Landmark Bancorp

Anyone interested in Landmark Bancorp, Inc. (NASDAQ:LARK) should probably be aware that the Independent Chairman, Patrick Alexander, recently divested US$109k worth of shares in the company, at an average price of US$32.50 each. However, the silver lining is that the sale only reduced their total holding by 4.6%, so we're hesitant to read anything much into it, on its own.

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Landmark Bancorp Insider Transactions Over The Last Year

In fact, the recent sale by Independent Chairman Patrick Alexander was not their only sale of Landmark Bancorp shares this year. Earlier in the year, they fetched US$28.77 per share in a -US$257k sale. So it's clear an insider wanted to take some cash off the table, even below the current price of US$31.72. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent 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 11% of Patrick Alexander's stake.

Over the last year, we can see that insiders have bought 1.24k shares worth US$38k. On the other hand they divested 22.43k shares, for US$663k. In total, Landmark Bancorp 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. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Landmark Bancorp insiders own about US$35m worth of shares. That equates to 18% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Landmark Bancorp Tell Us?

Insiders haven't bought Landmark Bancorp stock in the last three months, but there was some selling. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But it is good to see that Landmark Bancorp is growing earnings. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Landmark Bancorp. While conducting our analysis, we found that Landmark Bancorp has 1 warning sign and it would be unwise to ignore this.

But note: Landmark 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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