Have Southern First Bancshares, Inc. (NASDAQ:SFST) Insiders Been Selling Their Stock?

By
Simply Wall St
Published
February 07, 2021
NasdaqGM:SFST

Investors may wish to note that the Independent Director of Southern First Bancshares, Inc., Anne Ellefson, recently netted US$90k from selling stock, receiving an average price of US$40.01. It wasn't a huge sale, but it did reduce their holding by 19%. This does not instill confidence.

View our latest analysis for Southern First Bancshares

The Last 12 Months Of Insider Transactions At Southern First Bancshares

The Executive VP, Michael Dowling, made the biggest insider sale in the last 12 months. That single transaction was for US$105k worth of shares at a price of US$35.20 each. That means that even when the share price was below the current price of US$41.70, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 6.6% of Michael Dowling's holding.

Over the last year we saw more insider selling of Southern First Bancshares shares, than buying. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NasdaqGM:SFST Insider Trading Volume February 7th 2021

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

Does Southern First Bancshares Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Southern First Bancshares insiders own about US$22m worth of shares. That equates to 6.8% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Southern First Bancshares Tell Us?

Insiders sold Southern First Bancshares shares recently, but they didn't buy any. Despite some insider buying, the longer term picture doesn't make us feel much more positive. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. In terms of investment risks, we've identified 3 warning signs with Southern First Bancshares and understanding these should be part of your investment process.

Of course Southern First Bancshares 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, but not derivative transactions.

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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.
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