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 before you buy or sell Bank of Commerce Holdings (NASDAQ:BOCH), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. 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'.
The Last 12 Months Of Insider Transactions At Bank of Commerce Holdings
In the last twelve months, the biggest single purchase by an insider was when Chairman of the Board Lyle Tullis bought US$231k worth of shares at a price of US$11.54 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$10.01). Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Over the last year, we can see that insiders have bought 72886 shares worth US$803k. Bank of Commerce Holdings insiders may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by 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!
Bank of Commerce Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Bank of Commerce Holdings Insiders Bought Stock Recently
It's good to see that Bank of Commerce Holdings insiders have made notable investments in the company's shares. Overall, four insiders shelled out US$133k for shares in the company -- and none sold. That shows some optimism about the company's future.
Insider Ownership of Bank of Commerce Holdings
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 6.4% of Bank of Commerce Holdings shares, worth about US$12m. 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 Does This Data Suggest About Bank of Commerce Holdings Insiders?
The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. Given that insiders also own a fair bit of Bank of Commerce Holdings we think they are probably pretty confident of a bright future. Of course, the future is what matters most. So if you are interested in Bank of Commerce Holdings, you should check out this free report on analyst forecasts for the company.
But note: Bank of Commerce Holdings 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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.