Some Commerce Bancshares, Inc. (NASDAQ:CBSH) shareholders may be a little concerned to see that the Executive VP & CFO, Charles Kim, recently sold a substantial US$1.0m worth of stock at a price of US$59.18 per share. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 9.2%.

Commerce Bancshares Insider Transactions Over The Last Year

The President, John Kemper, made the biggest insider sale in the last 12 months. That single transaction was for US$1.3m worth of shares at a price of US$53.99 each. That means that an insider was selling shares at slightly below the current price (US$59.44). 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. We note that the biggest single sale was only 10% of John Kemper's holding.

Over the last year we saw more insider selling of Commerce Bancshares shares, than buying. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Commerce Bancshares better if I see some big insider buys.

Does Commerce Bancshares Boast High 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. Commerce Bancshares insiders own 2.9% of the company, currently worth about US$248m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Commerce Bancshares Tell Us?

Insiders sold Commerce Bancshares shares recently, but they didn't buy any. Zooming out, the longer term picture doesn't give us much comfort. On the plus side, Commerce Bancshares makes money, and is growing profits. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Commerce Bancshares. While conducting our analysis, we found that Commerce Bancshares has 1 warning sign and it would be unwise to ignore it.

Of course Commerce Bancshares may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.