Have Insiders Been Buying Rhinebeck Bancorp, Inc. (NASDAQ:RBKB) Shares?

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 Rhinebeck Bancorp, Inc. (NASDAQ:RBKB), you may well want to know whether insiders have been buying or selling.

What Is Insider Selling?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a 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 Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

View our latest analysis for Rhinebeck Bancorp

The Last 12 Months Of Insider Transactions At Rhinebeck Bancorp

Over the last year, we can see that the biggest insider purchase was by Director Steven Howell for US$68k worth of shares, at about US$6.88 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$9.51. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

Happily, we note that in the last year insiders paid US$236k for 30.99k shares. On the other hand they divested 750.00 shares, for US$5.2k. In the last twelve months there was more buying than selling by Rhinebeck Bancorp insiders. They paid about US$7.61 on average. We don't deny that it is nice to see insiders buying stock in the company. However, we do note that they were buying at significantly lower prices than today's share price. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Rhinebeck Bancorp is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does Rhinebeck Bancorp Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Based on our data, Rhinebeck Bancorp insiders have about 3.1% of the stock, worth approximately US$3.1m. But they may have an indirect interest through a corporate structure that we haven't picked up on. We consider this fairly low insider ownership.

So What Does This Data Suggest About Rhinebeck Bancorp Insiders?

It doesn't really mean much that no insider has traded Rhinebeck Bancorp shares in the last quarter. However, our analysis of transactions over the last year is heartening. We'd like to see bigger individual holdings. However, we don't see anything to make us think Rhinebeck Bancorp insiders are doubting the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 1 warning sign for Rhinebeck Bancorp that deserve your attention before buying any shares.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, but not derivative transactions.

If you decide to trade Rhinebeck Bancorp, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

This article by Simply Wall St is general in nature. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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