We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in The First Bancorp, Inc. (NASDAQ:FNLC).
What Is Insider Buying?
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 would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
Check out our latest analysis for First Bancorp
First Bancorp Insider Transactions Over The Last Year
The CRA Officer & Compliance Officer, Susan Norton, made the biggest insider sale in the last 12 months. That single transaction was for US$91k worth of shares at a price of US$30.29 each. So what is clear is that an insider saw fit to sell at around the current price of US$26.52. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.
Over the last year we saw more insider selling of First Bancorp 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 Bancorp 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 Bancorp Have Sold Stock Recently
Over the last three months, we’ve seen a bit of insider selling at First Bancorp. Executive VP & Clerk Charles Wootton sold just US$33k worth of shares in that time. It’s not great to see insider selling, nor the lack of recent buyers. But the volume sold is so low that it really doesn’t bother us.
Insider Ownership of First Bancorp
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it’s a good sign if insiders own a significant number of shares in the company. First Bancorp insiders own about US$20m worth of shares. That equates to 6.9% of the company. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At First Bancorp Tell Us?
We did not see any insider buying in the last three months, but we did see selling. But given the selling was modest, we’re not worried. Recent sales exacerbate our caution arising from analysis of First Bancorp insider transactions. The modest level of insider ownership is, at least, some comfort. To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .
But note: First Bancorp 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.
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