We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So we’ll take a look at whether insiders have been buying or selling shares in The First Bancorp, Inc. (NASDAQ:FNLC).
What Is Insider Buying?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. 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 First Bancorp
The President, Tony McKim, made the biggest insider sale in the last 12 months. That single transaction was for US$204k worth of shares at a price of US$28.40 each. While we don’t usually like to see insider selling, it’s more concerning if the sales take place at a lower price. It’s of some comfort that this sale was conducted at a price well above the current share price, which is US$21.56. So it may not tell us anything about how insiders feel about the current share price.
In the last twelve months insiders purchased 10.87k shares for US$234k. On the other hand they divested 8.37k shares, for US$231k. In the last twelve months there was more buying than selling by First Bancorp insiders. The average buy price was around US$21.49. Although they bought at below the recent share price, it is good to see that insiders are willing to invest in the company. 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
First Bancorp Insiders Bought Stock Recently
There was some insider buying at First Bancorp over the last quarter. In that period President Tony McKim spent US$39k on shares. But Executive VP & Clerk Charles Wootton sold US$13k worth. It is good to see that insiders have been buying, but they did not buy very many shares, in the scheme of things.
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It appears that First Bancorp insiders own 9.3% of the company, worth about US$22m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About First Bancorp Insiders?
Our data shows a little insider buying, but no selling, in the last three months. The net investment is not enough to encourage us much. However, our analysis of transactions over the last year is heartening. Overall we don’t see anything to make us think First Bancorp insiders are doubting the company, and they do own shares. Along with insider transactions, I recommend checking if First Bancorp is growing revenue. This free chart of historic revenue and earnings should make that easy.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, but not derivative transactions.
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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. 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.
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