Should You Take Comfort From Insider Transactions At First Northwest Bancorp (NASDAQ:FNWB)?

It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in First Northwest Bancorp (NASDAQ:FNWB).

Do Insider Transactions Matter?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.

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. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

View our latest analysis for First Northwest Bancorp

The Last 12 Months Of Insider Transactions At First Northwest Bancorp

Over the last year, we can see that the biggest insider purchase was by President Matthew Deines for US$58k worth of shares, at about US$11.55 per share. We do like to see buying, but this purchase was made at well below the current price of US$14.66. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

In the last twelve months insiders purchased 43.99k shares for US$531k. On the other hand they divested 5.43k shares, for US$66k. In the last twelve months there was more buying than selling by First Northwest Bancorp insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insiders at First Northwest Bancorp Have Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at First Northwest Bancorp. In that period insiders spent US$49k on shares. But insider David Flodstrom sold US$3.2k worth. It is good to see that insiders have been buying, but they did not buy very many shares, in the scheme of things.

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. From our data, it seems that First Northwest Bancorp insiders own 4.7% of the company, worth about US$6.5m. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Does This Data Suggest About First Northwest Bancorp Insiders?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. That said, the purchases were not large. On a brighter note, the transactions over the last year are encouraging. While we have no worries about the insider transactions, we'd be more comfortable if they owned more First Northwest Bancorp stock. 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 Northwest Bancorp has 2 warning signs and it would be unwise to ignore these.

But note: First Northwest 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.

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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