We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Bryn Mawr Bank Corporation (NASDAQ:BMTC), you may well want to know whether insiders have been buying or selling.
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, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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 Bryn Mawr Bank
In the last twelve months, the biggest single purchase by an insider was when CFO & Executive VP Michael Harrington bought US$91k worth of shares at a price of US$30.43 per share. Even though the purchase was made at a significantly lower price than the recent price (US$48.37), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
Bryn Mawr Bank insiders may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Bryn Mawr Bank is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Bryn Mawr Bank
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It appears that Bryn Mawr Bank insiders own 1.6% of the company, worth about US$15m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Bryn Mawr Bank Insider Transactions Indicate?
The fact that there have been no Bryn Mawr Bank insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Bryn Mawr Bank and their transactions don't cause us concern. Of course, the future is what matters most. So if you are interested in Bryn Mawr Bank, you should check out this free report on analyst forecasts for the company.
But note: Bryn Mawr Bank 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.
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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