It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in ACNB Corporation (NASDAQ:ACNB).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
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. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
The Last 12 Months Of Insider Transactions At ACNB
Over the last year, we can see that the biggest insider sale was by Donald Seibel for US$484k worth of shares, at about US$39.50 per share. So we know that an insider sold shares at around the present share price of US$38.27. They could have a variety of motivations for selling, but it’s still not particularly encouraging to see. We usually pause to reflect on the potential that a stock has a high valuation, if insiders have been selling at around the current price.
Over the last year, we can see that insiders have bought 7.50k shares worth US$256k. But insiders sold 13.60k shares worth US$517k. All up, insiders sold more shares in ACNB than they bought, over the last year. The average sell price was around US$37.98. We don’t gain confidence from insider selling below the recent share price. Of course, the sales could be motivated for a multitude of reasons, so we shouldn’t jump to conclusions. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
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Insiders at ACNB Have Sold Stock Recently
There was substantially more insider selling, than buying, of ACNB shares over the last three months. We note insiders cashed in US$517k worth of shares. Meanwhile insiders bought US$44k worth. Because the selling vastly outweighs the buying, we’d say this is a somewhat bearish sign.
Does ACNB Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it’s a good sign if insiders own a significant number of shares in the company. ACNB insiders own about US$11m worth of shares. That equates to 4.1% of the company. 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 ACNB Insiders?
Unfortunately, there has been more insider selling of ACNB stock, than buying, in the last three months. Despite some insider buying, the longer term picture doesn’t make us feel much more positive. On the plus side, ACNB makes money, and is growing profits. Insiders own shares, but we’re still pretty cautious, given the history of sales. We’re in no rush to buy! I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.