Those following along with Coastal Financial Corporation (NASDAQ:CCB) will no doubt be intrigued by the recent purchase of shares by Steven Hovde, Vice Chairman of the company, who spent a stonking US$658k on stock at an average price of US$43.88. While that only increased their holding size by 0.9%, it is still a big swing by our standards.

The Last 12 Months Of Insider Transactions At Coastal Financial

In fact, the recent purchase by Steven Hovde was the biggest purchase of Coastal Financial shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at around the current price of US$45.34. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. In this case we're pleased to report that the insider purchases were made at close to current prices. We note that Steven Hovde was also the biggest seller.

In the last twelve months insiders purchased 25.29k shares for US$1.1m. But insiders sold 17.77k shares worth US$2.0m. All up, insiders sold more shares in Coastal Financial than they bought, over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like Coastal Financial better if I see some big insider buys.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Coastal Financial insiders own about US$96m worth of shares. That equates to 14% 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. But we can't say the same for the transactions over the last 12 months. While recent transactions indicate confidence in Coastal Financial, insiders don't own enough of the company to overcome our cautiousness about the longer term transactions. So they seem pretty well aligned, overall. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example - Coastal Financial has 1 warning sign we think you should be aware of.

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 of direct interests only, but not derivative transactions or indirect interests.

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.