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 we’ll take a look at whether insiders have been buying or selling shares in Sandnes Sparebank (OB:SADG).
Do Insider Transactions Matter?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
The Last 12 Months Of Insider Transactions At Sandnesrebank
Over the last year, we can see that the biggest insider sale was by Ole Olsnes for øre435k worth of shares, at about øre51.00 per share. So it’s clear an insider wanted to take some cash off the table, even below the current price of øre59.50. Even though it doesn’t necessarily mean anything, that’s certainly not a positive sign, in our book. When an insider sells below the current price, it does tend to make us wonder about the current valuation. We note that the biggest single sale was only 37.9% of Ole Olsnes’s holding.
Happily, we note that in the last year insiders paid øre1.2m for 22.94k shares. On the other hand they divested 23.61k shares, for øre1.2m. In total, Sandnesrebank insiders bought more than they sold over the last year. Their average price was about øre52.93. It’s great to see insiders putting their own cash into the company’s stock, albeit at below the recent share price (øre59.50). You can see a visual depiction of insider transactions (by 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!
Sandnesrebank is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Sandnesrebank Have Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Sandnesrebank. Overall, 18 insiders shelled out øre798k for shares in the company — and none sold. This could be interpreted as suggesting a positive outlook.
Insider Ownership of Sandnesrebank
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Sandnesrebank insiders own 7.3% of the company, worth about øre100m. 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 Sandnesrebank Tell Us?
It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Sandnesrebank. Looks promising! 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.
But note: Sandnesrebank 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.