We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 on the market. However, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. 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.’
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Horizon Bancorp Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Chairman & CEO, Craig Dwight, sold US$71k worth of shares at a price of US$20.90 per share. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. It’s of some comfort that this sale was conducted at a price well above the current share price, which is US$16.07. So it is hard to draw any strong conclusion from it.
Over the last year, we can see that insiders have bought 4100 shares worth US$67k. But insiders sold 6466 shares worth US$135k. In total, Horizon Bancorp insiders sold more than they bought 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!
I will like Horizon 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.
Does Horizon Bancorp Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Horizon Bancorp insiders own about US$40m worth of shares. That equates to 5.5% 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.
So What Do The Horizon Bancorp Insider Transactions Indicate?
The fact that there have been no Horizon Bancorp insider transactions recently certainly doesn’t bother us. Our analysis of Horizon Bancorp insider transactions leaves us cautious. But it’s good to see that insiders own shares in 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: Horizon 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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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.