Don't Ignore The Insider Selling In Eagle Bancorp Montana

Anyone interested in Eagle Bancorp Montana, Inc. (NASDAQ:EBMT) should probably be aware that the Independent Director, Kenneth Walsh, recently divested US$110k worth of shares in the company, at an average price of US$16.44 each. On the bright side, that sale was only 4.5% of their holding, so we doubt it's very meaningful, on its own.

View our latest analysis for Eagle Bancorp Montana

Eagle Bancorp Montana Insider Transactions Over The Last Year

Notably, that recent sale by Independent Director Kenneth Walsh was not the only time they sold Eagle Bancorp Montana shares this year. Earlier in the year, they fetched US$14.44 per share in a -US$144k sale. That means that even when the share price was below the current price of US$16.90, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 6.4% of Kenneth Walsh's holding.

In the last twelve months insiders purchased 1.14k shares for US$15k. But insiders sold 54.71k shares worth US$763k. In total, Eagle Bancorp Montana insiders sold more than they bought over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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Does Eagle Bancorp Montana Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data indicates that Eagle Bancorp Montana insiders own about US$7.8m worth of shares (which is 6.1% of the company). We do generally prefer see higher levels of insider ownership.

So What Do The Eagle Bancorp Montana Insider Transactions Indicate?

Insiders sold stock recently, but they haven't been buying. Despite some insider buying, the longer term picture doesn't make us feel much more positive. Insiders own relatively few shares in the company, and when you consider the sales, we're not particularly excited about the stock. We'd certainly practice some caution before buying! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. While conducting our analysis, we found that Eagle Bancorp Montana has 1 warning sign and it would be unwise to ignore this.

Of course Eagle Bancorp Montana may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.