We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Cambridge Bancorp (NASDAQ:CATC).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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'.
Cambridge Bancorp Insider Transactions Over The Last Year
The Independent Director Leon Palandjian made the biggest insider purchase in the last 12 months. That single transaction was for US$158k worth of shares at a price of US$52.82 each. We do like to see buying, but this purchase was made at well below the current price of US$77.47. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
Happily, we note that in the last year insiders paid US$769k for 14.69k shares. But insiders sold 3.89k shares worth US$267k. Overall, Cambridge Bancorp insiders were net buyers during the last year. 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!
Cambridge Bancorp is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Cambridge Bancorp Insiders Are Selling The Stock
Over the last three months, we've seen a bit of insider selling at Cambridge Bancorp. Senior VP & Director of Private Banking Offices Kerri Mooney only netted US$11k selling shares, in that period. It's not great to see insider selling, nor the lack of recent buyers. But the amount sold isn't enough for us to put any weight on it.
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. Insiders own 2.9% of Cambridge Bancorp shares, worth about US$16m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Cambridge Bancorp Tell Us?
Our data shows a little more insider selling, but no insider buying, in the last three months. But the sales were small, so we're not concerned. But insiders have shown more of an appetite for the stock, over the last year. Overall we don't see anything to make us think Cambridge Bancorp insiders are doubting the company, and they do own shares. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. You'd be interested to know, that we found 1 warning sign for Cambridge Bancorp and we suggest you have a look.
But note: Cambridge Bancorp 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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