Don't Ignore The Insider Selling In Old Second Bancorp

We'd be surprised if Old Second Bancorp, Inc. (NASDAQ:OSBC) shareholders haven't noticed that the Independent Director, John Ladowicz, recently sold US$254k worth of stock at US$18.27 per share. However, the silver lining is that the sale only reduced their total holding by 6.6%, so we're hesitant to read anything much into it, on its own.

See our latest analysis for Old Second Bancorp

The Last 12 Months Of Insider Transactions At Old Second Bancorp

The Vice Chairman of the Board, Gary Collins, made the biggest insider sale in the last 12 months. That single transaction was for US$586k worth of shares at a price of US$14.57 each. That means that an insider was selling shares at slightly below the current price (US$18.61). 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 23% of Gary Collins's stake.

In total, Old Second Bancorp insiders sold more than they bought over 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership Of Old Second Bancorp

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. It appears that Old Second Bancorp insiders own 3.6% of the company, worth about US$30m. 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 Old Second Bancorp Insiders?

The stark truth for Old Second Bancorp is that there has been more insider selling than insider buying in the last three months. Zooming out, the longer term picture doesn't give us much comfort. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! 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 2 warning signs (1 is a bit concerning!) that you ought to be aware of before buying any shares in Old Second Bancorp.

Of course Old Second Bancorp may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.