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 we’ll take a look at whether insiders have been buying or selling shares in Sterling Bancorp (NYSE:STL).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Sterling Bancorp Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by Thomas Geisel for US$113k worth of shares, at about US$25.45 per share. That is hardly a positive sign, even though it took place above the latest price (US$15.91). So it may not tell us anything about how insiders feel about the current share price.
Over the last year, we can see that insiders have bought 14.00k shares worth US$288k. But they sold 6.60k for US$161k. Overall, Sterling Bancorp insiders were net buyers last year. They paid about US$20.57 on average. These transactions suggest that insiders have considered the current price of US$15.91 attractive. You can see the insider transactions over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Sterling Bancorp is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Sterling Bancorp Have Bought Stock Recently
Over the last quarter, Sterling Bancorp insiders have spent a meaningful amount on shares. We can see that Richard O’Toole paid US$85k for shares in the company. No-one sold. This makes one think the business has some good points.
Does Sterling 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It’s great to see that Sterling Bancorp insiders own 2.0% of the company, worth about US$74m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About Sterling Bancorp Insiders?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. Insiders likely see value in Sterling Bancorp shares, given these transactions (along with notable insider ownership of the company). If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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 firstname.lastname@example.org.