Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in First Savings Financial Group, Inc. (NASDAQ:FSFG).
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 Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
The Last 12 Months Of Insider Transactions At First Savings Financial Group
Over the last year, we can see that the biggest insider sale was by the COO, Corporate Secretary & Director, John Lawson, for US$250k worth of shares, at about US$50.45 per share. That means that an insider was selling shares at slightly below the current price (US$60.46). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it’s only a weak signal. We note that the biggest single sale was only 14.3% of John Lawson’s holding.
Happily, we note that in the last year insiders paid US$154k for 2878.77 shares. On the other hand they divested 17508 shares, for US$1.0m. All up, insiders sold more shares in First Savings Financial Group than they bought, over the last year. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at First Savings Financial Group Have Bought Stock Recently
There was some insider buying at First Savings Financial Group over the last quarter. In total, insiders bought US$113k worth of shares in that time. On the other hand, Director Samuel Eckart sold US$65k worth of shares. 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 of First Savings Financial Group
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 Savings Financial Group insiders own about US$27m worth of shares. That equates to 19% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At First Savings Financial Group Tell Us?
Insider purchases may have been minimal, in the last three months, but there was no selling at all. The net investment is not enough to encourage us much. Recent sales exacerbate our caution arising from analysis of First Savings Financial Group insider transactions. But we do like the fact that insiders own a fair chunk of the company. 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.
But note: First Savings Financial Group 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.