Should You Take Comfort From Insider Transactions At Berkshire Hills Bancorp, Inc. (NYSE:BHLB)?

It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in Berkshire Hills Bancorp, Inc. (NYSE:BHLB).

What Is Insider Buying?

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 logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’

See our latest analysis for Berkshire Hills Bancorp

The Last 12 Months Of Insider Transactions At Berkshire Hills Bancorp

In the last twelve months, the biggest single purchase by an insider was when Patrick Sheehan bought US$332k worth of shares at a price of US$37.35 per share. That means that even when the share price was higher, an insider wanted to purchase shares. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. It’s not at all bad to see insiders buy shares at or above current prices.

In the last twelve months insiders purchased 20.76k shares for US$687k. But insiders sold 1.50k shares worth US$64k. Overall, Berkshire Hills Bancorp insiders were net buyers last year. They paid about US$33.08 on average. These transactions suggest that insiders have considered the current price of US$28.14 attractive. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

NYSE:BHLB Insider Trading January 24th 19
NYSE:BHLB Insider Trading January 24th 19

Berkshire Hills Bancorp is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insiders at Berkshire Hills Bancorp Have Bought Stock Recently

Over the last three months, we’ve seen significant insider buying at Berkshire Hills Bancorp. In total, insiders bought US$262k worth of shares in that time, and we didn’t record any sales whatsoever. This makes one think the business has some good points.

Does Berkshire Hills 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Berkshire Hills Bancorp insiders own about US$205m worth of shares (which is 16% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Berkshire Hills Bancorp Tell Us?

It’s certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest Berkshire Hills Bancorp insiders are well aligned, and quite possibly think the share price is too low. One for the watchlist, at least! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Berkshire Hills Bancorp.

But note: Berkshire Hills 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.