Should You Be Worried About Insider Transactions At Northrim BanCorp Inc (NASDAQ:NRIM)?

We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Northrim BanCorp Inc (NASDAQ:NRIM).

What Is Insider Buying?

It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Colombia 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’.

See our latest analysis for Northrim BanCorp

The Last 12 Months Of Insider Transactions At Northrim BanCorp

Over the last year, we can see that the biggest insider sale was by Director David Wight for US$88k worth of shares, at about US$44.15 per share. So we know that an insider sold shares at around the present share price of US$36.47. While their view may have changed since the sale, this is not a particularly positive fact. We usually pause to reflect on the potential that a stock has a high valuation, if insiders have been selling at that price.

In the last twelve months insiders purchased 4.41k shares for US$168k. On the other hand they divested 4.40k shares, for US$180k. You can see the insider transactions over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

NasdaqGS:NRIM Insider Trading December 3rd 18
NasdaqGS:NRIM Insider Trading December 3rd 18

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Northrim BanCorp Insiders Bought Stock Recently

Over the last three months, we’ve seen a bit of insider buying at Northrim BanCorp. Insiders bought US$47k worth of shares in that time. We like it when there are only buyers, and no sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Insider Ownership of Northrim BanCorp

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Northrim BanCorp insiders own about US$5.0m worth of shares (which is 2.0% of the company). Whilst better than nothing, we’re not overly impressed by these holdings.

So What Does This Data Suggest About Northrim BanCorp Insiders?

Insider purchases have outweighed sales, in the last three months. But overall the difference isn’t worth writing home about. The insider transactions at Northrim BanCorp are not inspiring us to buy. And we’re not picking up on high enough insider ownership to give us any comfort. 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: Northrim 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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.