Should You Take Comfort From Insider Transactions At The Bank of Princeton (NASDAQ:BPRN)?

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 we’ll take a look at whether insiders have been buying or selling shares in The Bank of Princeton (NASDAQ:BPRN).

What Is Insider Selling?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, such insiders must disclose their trading activities, and not trade on inside information.

We don’t think shareholders should simply follow insider transactions. 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’.

View our latest analysis for Bank of Princeton

The Last 12 Months Of Insider Transactions At Bank of Princeton

Over the last year, we can see that the biggest insider purchase was by Martin Tuchman for US$1.0m worth of shares, at about US$32.75 per share. That means that an insider was happy to buy shares at above the current price of US$32.38. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months insiders purchased 165k shares for US$5.3m. But they sold 20545 for US$669k. In total, Bank of Princeton insiders bought more than they sold over the last year. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

NasdaqGS:BPRN Recent Insider Trading, April 23rd 2019
NasdaqGS:BPRN Recent Insider Trading, April 23rd 2019

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insiders at Bank of Princeton Have Bought Stock Recently

There has been significantly more insider buying, than selling, at Bank of Princeton, over the last three months. Martin Tuchman spent US$1.2m on stock. But we did see insider selling worth US$669k. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.

Insider Ownership of Bank of Princeton

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. Bank of Princeton insiders own about US$46m worth of shares. That equates to 21% of the company. 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 Do The Bank of Princeton Insider Transactions Indicate?

It’s certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. Given that insiders also own a fair bit of Bank of Princeton we think they are probably pretty confident of a bright future. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Bank of Princeton.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.