We often see insiders buying up shares in companies that perform well over the long term. 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 Northfield Bancorp, Inc. (Staten Island, NY) (NASDAQ:NFBK), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
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, such insiders must disclose their trading activities, and not trade on inside information.
We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
Northfield Bancorp (Staten Island NY) Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the insider, Michael Widmer, for US$469k worth of shares, at about US$12.00 per share. That means that even when the share price was below the current price of US$14.00, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent 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. It is worth noting that this sale was only 44% of Michael Widmer's holding.
In the last twelve months insiders purchased 69.80k shares for US$735k. But insiders sold 54.65k shares worth US$674k. Overall, Northfield Bancorp (Staten Island NY) insiders were net buyers during the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Northfield Bancorp (Staten Island NY) Insiders Are Selling The Stock
We have seen a bit of insider selling at Northfield Bancorp (Staten Island NY), over the last three months. In total, insiders sold US$57k worth of shares in that time. But the good news is that Executive VP & Chief Lending Officer David Fasanella bought US$34k worth. While it's not great to see insider selling, the net amount sold isn't enough for us to want to read anything into it.
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. Insiders own 4.3% of Northfield Bancorp (Staten Island NY) shares, worth about US$31m. 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 Northfield Bancorp (Staten Island NY) Insider Transactions Indicate?
Insider selling has just outweighed insider buying in the last three months. But the difference isn't enough to have us worried. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Northfield Bancorp (Staten Island NY) and their transactions don't cause us concern. While we like knowing 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 Northfield Bancorp (Staten Island NY) has 3 warning signs and it would be unwise to ignore these.
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.
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