We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Buying?
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 Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Check out our latest analysis for First Financial Northwest
The Last 12 Months Of Insider Transactions At First Financial Northwest
Over the last year, we can see that the biggest insider sale was by Director Gary Faull for US$213k worth of shares, at about US$17.22 per share. So we know that an insider sold shares at around the present share price of US$15.76. While their view may have changed since the sale, this is not a particularly positive fact. We usually pause to reflect on the potential that a stock has a high valuation, if insiders have been selling at that price.
The chart below shows insider transactions 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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insiders at First Financial Northwest Have Sold Stock Recently
We’ve seen more insider selling than insider buying at First Financial Northwest recently. In that time, Gary Faull dumped US$261k worth of shares. Meanwhile Director Kevin Padrick bought US$21k worth. Because the selling vastly outweighs the buying, we’d say this is a somewhat bearish sign.
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. I reckon it’s a good sign if insiders own a significant number of shares in the company. First Financial Northwest insiders own 3.4% of the company, worth about US$5.5m. Overall, this level of ownership isn’t that impressive, but it’s certainly better than nothing!
So What Do The First Financial Northwest Insider Transactions Indicate?
Unfortunately, there has been more insider selling of First Financial Northwest stock, than buying, in the last three months. Furthermore, transactions over the last twelve months dispel the notion that insiders won’t sell readily. But it is good to see that First Financial Northwest is growing earnings. When you combine this with the relatively low insider ownership, we are very cautious about the stock. So we’re not rushing to buy, to say the least. Of course, the future is what matters most. So if you are interested in First Financial Northwest, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.