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 we’ll take a look at whether insiders have been buying or selling shares in First Financial Northwest, Inc. (NASDAQ:FFNW).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
First Financial Northwest Insider Transactions Over The Last Year
The Director, Gary Faull, made the biggest insider sale in the last 12 months. That single transaction was for US$213k worth of shares at a price of US$17.22 each. So what is clear is that an insider saw fit to sell at around the current price of US$16.69. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. In this case, the big sale took place at around the current price, so it’s not too bad (but it’s still not a positive).
Over the last year we saw more insider selling of First Financial Northwest shares, than buying. 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!
I will like First Financial Northwest better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders at First Financial Northwest Have Sold Stock Recently
The last three months saw significant insider selling at First Financial Northwest. In total, President Joseph Kiley sold US$159k worth of shares in that time, and we didn’t record any purchases whatsoever. In light of this it’s hard to argue that all the directors think that the shares are a bargain.
Does First Financial Northwest Boast High Insider Ownership?
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 3.4% of First Financial Northwest shares, worth about US$5.6m, according to our data. Whilst better than nothing, we’re not overly impressed by these holdings.
What Might The Insider Transactions At First Financial Northwest Tell Us?
An insider hasn’t bought First Financial Northwest stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn’t bring confidence, either. On the plus side, First Financial Northwest makes money, and is growing profits. Insiders own relatively few shares in the company, and when you consider the sales, we’re not particularly excited about the stock. So we’re not rushing to buy, to say the least. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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