We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in First Choice Bancorp (NASDAQ:FCBP).
What Is Insider Selling?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
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. 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 First Choice Bancorp
Over the last year, we can see that the biggest insider purchase was by Independent Chairman of the Board Peter Hui for US$201k worth of shares, at about US$18.14 per share. Even though the purchase was made at a significantly lower price than the recent price (US$31.56), 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.
Happily, we note that in the last year insiders paid US$1.1m for 65.92k shares. But they sold 22.20k shares for US$334k. Overall, First Choice 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. By clicking on the graph below, you can see the precise details of each insider transaction!
First Choice Bancorp is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at First Choice Bancorp Have Sold Stock Recently
The last three months saw some First Choice Bancorp insider selling. insider Thomas Iino sold just US$46k worth of shares in that time. 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.
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Insiders own 14% of First Choice Bancorp shares, worth about US$54m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At First Choice Bancorp Tell Us?
While there has not been any insider buying in the last three months, there has been selling. However, the sales are not big enough to concern us at all. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in First Choice Bancorp and their transactions don't cause us concern. 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. At Simply Wall St, we found 2 warning signs for First Choice Bancorp that deserve your attention before buying any shares.
Of course First Choice Bancorp 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, but not derivative transactions.
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