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It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in First Business Financial Services, Inc. (NASDAQ:FBIZ).
What Is Insider Buying?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
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 Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
First Business Financial Services Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the General Counsel, Barbara Conley, for US$51k worth of shares, at about US$24.22 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$15.15. 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 4.08k shares worth US$93k. On the other hand they divested 3.62k shares, for US$87k. In total, First Business Financial Services insiders bought more than they sold over the last year. Their average price was about US$22.82. These transactions suggest that insiders have considered the current price attractive. You can see the insider transactions (by companies and individuals) 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!
First Business Financial Services is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
First Business Financial Services Insiders Bought Stock Recently
We saw some First Business Financial Services insider buying shares in the last three months. Insiders shelled out US$12k for shares in that time. We like it when there are only buyers, and no sellers. However, in this case the amount invested recently is quite small.
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. From our data, it seems that First Business Financial Services insiders own 5.6% of the company, worth about US$7.2m. We do generally prefer see higher levels of insider ownership.
So What Do The First Business Financial Services Insider Transactions Indicate?
We note a that there has been a bit of insider buying recently (but no selling). The net investment is not enough to encourage us much. But insiders have shown more of an appetite for the stock, over the last year. While we have no worries about the insider transactions, we'd be more comfortable if they owned more First Business Financial Services stock. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing First Business Financial Services. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of First Business Financial Services.
But note: First Business Financial Services 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.
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.
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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