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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 Bar Harbor Bankshares (NYSEMKT:BHB).
What Is Insider Selling?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
We don't think shareholders should simply follow insider transactions. 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.
The Last 12 Months Of Insider Transactions At Bar Harbor Bankshares
In the last twelve months, the biggest single purchase by an insider was when Independent Director Scott Toothaker bought US$116k worth of shares at a price of US$21.63 per share. That means that even when the share price was higher than US$20.30 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
Happily, we note that in the last year insiders paid US$461k for 21.76k shares. On the other hand they divested 3064 shares, for US$71k. In the last twelve months there was more buying than selling by Bar Harbor Bankshares insiders. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Bar Harbor Bankshares 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 Bar Harbor Bankshares Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Bar Harbor Bankshares. Overall, three insiders shelled out US$74k for shares in the company -- and none sold. This could be interpreted as suggesting a positive outlook.
Insider Ownership of Bar Harbor Bankshares
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data indicates that Bar Harbor Bankshares insiders own about US$8.5m worth of shares (which is 2.7% of the company). Whilst better than nothing, we're not overly impressed by these holdings.
What Might The Insider Transactions At Bar Harbor Bankshares Tell Us?
It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Bar Harbor Bankshares stock. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example - Bar Harbor Bankshares has 2 warning signs we think you should be aware of.
But note: Bar Harbor Bankshares 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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