Investors who take an interest in First Financial Bankshares, Inc. (NASDAQ:FFIN) should definitely note that the Independent Director, Johnny Trotter, recently paid US$29.74 per share to buy US$119k worth of the stock. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.
First Financial Bankshares Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Lead Independent Director, Tucker Bridwell, for US$1.1m worth of shares, at about US$27.69 per share. That means that even when the share price was below the current price of US$30.60, 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. This single sale was just 9.6% of Tucker Bridwell's stake.
Happily, we note that in the last year insiders paid US$2.8m for 107.57k shares. But they sold 123.21k shares for US$3.5m. All up, insiders sold more shares in First Financial Bankshares than they bought, over the last year. They sold for an average price of about US$28.14. It's not too encouraging to see that insiders have sold at below the current price. Since insiders sell for many reasons, we wouldn't put too much weight on it. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like First Financial Bankshares better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Does First Financial Bankshares Boast High Insider Ownership?
Many investors like to check how much of a company is owned by 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. First Financial Bankshares insiders own 4.4% of the company, currently worth about US$188m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The First Financial Bankshares Insider Transactions Indicate?
It is good to see recent purchasing. But we can't say the same for the transactions over the last 12 months. The high levels of insider ownership, and the recent buying by some insiders suggests they are well aligned and optimistic. 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 First Financial Bankshares has 1 warning sign and it would be unwise to ignore this.
But note: First Financial Bankshares 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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