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 before you buy or sell Horizon Bancorp, Inc. (NASDAQ:HBNC), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. 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.'
Horizon Bancorp Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by President James Neff for US$55k worth of shares, at about US$15.77 per share. That means that an insider was happy to buy shares at around the current price of US$15.93. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. Happily, the Horizon Bancorp insiders decided to buy shares at close to current prices.
In the last twelve months insiders purchased 8400 shares for US$135k. But insiders sold 2500 shares worth US$52k. In total, Horizon Bancorp insiders bought more than they sold over the last year. 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!
Insiders at Horizon Bancorp Have Bought Stock Recently
Over the last quarter, Horizon Bancorp insiders have spent a meaningful amount on shares. James Neff spent US$68k on stock, and there wasn't any selling. This could be interpreted as suggesting a positive outlook.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Horizon Bancorp insiders own 5.6% of the company, worth about US$40m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About Horizon Bancorp Insiders?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. Insiders likely see value in Horizon Bancorp shares, given these transactions (along with notable insider ownership of the company). Of course, the future is what matters most. So if you are interested in Horizon Bancorp, you should check out this free report on analyst forecasts for the company.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.
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 firstname.lastname@example.org. 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.