Insiders At NBT Bancorp Sold US$11m In Stock, Alluding To Potential Weakness

Over the past year, many NBT Bancorp Inc. (NASDAQ:NBTB) insiders sold a significant stake in the company which may have piqued investors' interest. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for NBT Bancorp

The Last 12 Months Of Insider Transactions At NBT Bancorp

Over the last year, we can see that the biggest insider sale was by the Independent Director, VanNess Robinson, for US$3.6m worth of shares, at about US$44.78 per share. That means that an insider was selling shares at slightly below the current price (US$47.62). 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 16% of VanNess Robinson's holding.

Over the last year we saw more insider selling of NBT Bancorp shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

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NBT Bancorp Insiders Are Selling The Stock

The last three months saw significant insider selling at NBT Bancorp. Specifically, insiders ditched US$4.0m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Does NBT Bancorp Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. NBT Bancorp insiders own about US$61m worth of shares. That equates to 2.7% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About NBT Bancorp Insiders?

Insiders sold NBT Bancorp shares recently, but they didn't buy any. Zooming out, the longer term picture doesn't give us much comfort. But since NBT Bancorp is profitable and growing, we're not too worried by this. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! 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. While conducting our analysis, we found that NBT Bancorp has 1 warning sign and it would be unwise to ignore this.

But note: NBT 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 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.