We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Bank of Marin Bancorp (NASDAQ:BMRC).
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
The Last 12 Months Of Insider Transactions At Bank of Marin Bancorp
In the last twelve months, the biggest single sale by an insider was when the President, Russell Colombo, sold US$215k worth of shares at a price of US$42.00 per share. So what is clear is that an insider saw fit to sell at around the current price of US$41.71. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.
We note that in the last year insiders divested 17955.03 shares for a total of US$766k. Bank of Marin Bancorp insiders didn’t buy any shares over the last year. You can see the insider transactions (by 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!
Insiders at Bank of Marin Bancorp Have Sold Stock Recently
The last three months saw significant insider selling at Bank of Marin Bancorp. Specifically, Executive Vice President of Retail Banking – Bank of Marin Peter Pelham ditched US$152k worth of shares in that time, and we didn’t record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. It appears that Bank of Marin Bancorp insiders own 12% of the company, worth about US$68m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Bank of Marin Bancorp Insiders?
An insider hasn’t bought Bank of Marin Bancorp stock in the last three months, but there was some selling. And even if we look to the last year, we didn’t see any purchases. But it is good to see that Bank of Marin Bancorp is growing earnings. Insiders own shares, but we’re still pretty cautious, given the history of sales. So we’d only buy after careful consideration. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity 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.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.