Don't Ignore The Insider Selling In HBT Financial

We'd be surprised if HBT Financial, Inc. (NASDAQ:HBT) shareholders haven't noticed that the Director, Patrick Busch, recently sold US$278k worth of stock at US$24.09 per share. However, the silver lining is that the sale only reduced their total holding by 4.6%, so we're hesitant to read anything much into it, on its own.

View our latest analysis for HBT Financial

The Last 12 Months Of Insider Transactions At HBT Financial

In fact, the recent sale by Patrick Busch was the biggest sale of HBT Financial shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of US$24.24. 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. This single sale was just 4.6% of Patrick Busch's stake.

In the last twelve months insiders purchased 22.45k shares for US$420k. But insiders sold 11.56k shares worth US$278k. Overall, HBT Financial insiders were net buyers during the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

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

Insider Ownership

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. HBT Financial insiders own 60% of the company, currently worth about US$459m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The HBT Financial Insider Transactions Indicate?

Unfortunately, there has been more insider selling of HBT Financial stock, than buying, in the last three months. On the other hand, the insider transactions over the last year are encouraging. We are also comforted by the high levels of insider ownership. So we're not too bothered by recent selling. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To help with this, we've discovered 3 warning signs (1 shouldn't be ignored!) that you ought to be aware of before buying any shares in HBT Financial.

But note: HBT Financial 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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com