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 shareholders might well want to know whether insiders have been buying or selling shares in 1st Constitution Bancorp (NASDAQ:FCCY).
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 equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Want to participate in a short research study? Help shape the future of investing tools and receive a $60 prize!
The Last 12 Months Of Insider Transactions At 1st Constitution Bancorp
Over the last year, we can see that the biggest insider purchase was by Director James Aaron for US$111k worth of shares, at about US$22.27 per share. That means that an insider was happy to buy shares at above the current price. Their view may have changed since then, but at least it shows they felt optimistic at the time. It’s not at all bad to see insiders buy shares at or above current prices.
Over the last year, we can see that insiders have bought 13.51k shares worth US$285k. On the other hand they divested 2.00k shares, for US$44k. Overall, 1st Constitution Bancorp insiders were net buyers last year. They paid about US$21.10 on average. This is nice to see since it implies that insiders might see value around current prices (around US$19.56). You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
1st Constitution Bancorp is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
1st Constitution Bancorp Insiders Bought Stock Recently
Over the last quarter, 1st Constitution Bancorp insiders have spent a meaningful amount on shares. Corporate Secretary & Director William Rue spent US$99k on stock, and there wasn’t any selling. This is a positive in our book as it implies some confidence.
Does 1st Constitution Bancorp Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 14% of 1st Constitution Bancorp shares, worth about US$23m. 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 1st Constitution Bancorp Insiders?
It is good to see recent insider purchase. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest 1st Constitution Bancorp insiders are well aligned, and that they may think the share price is too low. 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.
But note: 1st Constitution Bancorp 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 email@example.com.