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Should You Take Comfort From Insider Transactions At Bassett Furniture Industries, Incorporated (NASDAQ:BSET)?

Tammie Asher

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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 before you buy or sell Bassett Furniture Industries, Incorporated (NASDAQ:BSET), you may well want to know whether insiders have been buying or selling.

What Is Insider Selling?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. 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 it is perfectly logical to keep tabs on what insiders are doing. 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.’

Check out our latest analysis for Bassett Furniture Industries

The Last 12 Months Of Insider Transactions At Bassett Furniture Industries

In the last twelve months, the biggest single purchase by an insider was when Independent Director John Belk bought US$315k worth of shares at a price of US$20.99 per share. So it’s clear an insider wanted to buy, even at a higher price. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. We generally consider it a positive if insiders have been buying on market, even above the current price. John Belk was the only individual insider to buy shares in the last twelve months.

You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

NASDAQGS:BSET Insider Trading February 14th 19

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Insider Ownership of Bassett Furniture Industries

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. I reckon it’s a good sign if insiders own a significant number of shares in the company. It appears that Bassett Furniture Industries insiders own 5.4% of the company, worth about US$11m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.

So What Do The Bassett Furniture Industries Insider Transactions Indicate?

There haven’t been any insider transactions in the last three months — that doesn’t mean much. But insiders have shown more of an appetite for the stock, over the last year. Overall we don’t see anything to make us think Bassett Furniture Industries insiders are doubting the company, and they do own shares. Of course, the future is what matters most. So if you are interested in Bassett Furniture Industries, you should check out this free report on analyst forecasts for the company.

But note: Bassett Furniture Industries 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.