We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 FNCB Bancorp, Inc. (NASDAQ:FNCB).
What Is Insider Selling?
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 it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
FNCB Bancorp Insider Transactions Over The Last Year
Vice Chairman of the Board Louis DeNaples made the biggest insider purchase in the last 12 months. That single transaction was for US$1.0m worth of shares at a price of US$7.00 each. That implies that an insider found the current (approximate) price enticing. Of course they may have changed their mind. But this suggests they are optimistic. We generally consider it a positive if insiders have been buying on market, even if the share price has increased a bit since then.
Over the last year, we can see that insiders have bought 301.25k shares worth US$2.2m. On the other hand they divested 6.97k shares, for US$60k. In total, FNCB Bancorp insiders bought more than they sold over the last year. They paid about US$7.44 on average. Although they bought at below the recent price of US$7.65 per share, it is good to see that insiders are willing to invest in the company. 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!
FNCB 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 FNCB Bancorp Have Bought Stock Recently
Over the last quarter, FNCB Bancorp insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought US$1.7m worth of shares. This makes one think the business has some good points.
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. We usually like to see fairly high levels of insider ownership. Insiders own 16% of FNCB Bancorp shares, worth about US$24m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About FNCB Bancorp Insiders?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. Insiders likely see value in FNCB Bancorp shares, given these transactions (along with notable insider ownership of the company). To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.