We'd be surprised if First Commonwealth Financial Corporation (NYSE:FCF) shareholders haven't noticed that the Executive VP, Matthew Tomb, recently sold US$158k worth of stock at US$12.61 per share. That sale was 20% of their holding, so it does make us raise an eyebrow.
The Last 12 Months Of Insider Transactions At First Commonwealth Financial
In fact, the recent sale by Matthew Tomb was the biggest sale of First Commonwealth Financial shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was slightly below the current price of US$12.86, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent 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 20% of Matthew Tomb's stake.
Happily, we note that in the last year insiders paid US$270k for 30.33k shares. But they sold 12.50k shares for US$158k. Overall, First Commonwealth Financial insiders were net buyers during the last year. Their average price was about US$8.91. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today's share price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that First Commonwealth Financial insiders own 1.7% of the company, worth about US$20m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About First Commonwealth Financial Insiders?
The insider sales have outweighed the insider buying, at First Commonwealth Financial, in the last three months. But we take heart from prior transactions. And insiders do own shares. So we're not overly bothered by recent selling. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 2 warning signs with First Commonwealth Financial and understanding these should be part of your investment process.
Of course First Commonwealth Financial 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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