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 Eagle Bancorp Montana, Inc. (NASDAQ:EBMT).
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 in the 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 logic dictates you should pay some attention to whether insiders are buying or selling shares. 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 Eagle Bancorp Montana
In the last twelve months, the biggest single sale by an insider was when the Director, Kenneth Walsh, sold US$89k worth of shares at a price of US$17.87 per share. So what is clear is that an insider saw fit to sell at around the current price of US$16.03. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).
Over the last year, we can see that insiders have bought 9590 shares worth US$164k. But insiders sold 10236 shares worth US$179k. In total, Eagle Bancorp Montana insiders sold more than they bought over the last year. 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!
I will like Eagle Bancorp Montana better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders at Eagle Bancorp Montana Have Bought Stock Recently
We saw some Eagle Bancorp Montana insider buying shares in the last three months. They bought US$101k worth in that time. But they sold US$89k worth. It is good to see that insiders have been buying, but they did not buy very many shares, in the scheme of things.
Does Eagle Bancorp Montana Boast High Insider Ownership?
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. 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 9.7% of Eagle Bancorp Montana shares, worth about US$9.8m, according to our data. Whilst better than nothing, we're not overly impressed by these holdings.
What Might The Insider Transactions At Eagle Bancorp Montana Tell Us?
Insider purchases may have been minimal, in the last three months, but there was no selling at all. That said, the purchases were not large. We're a little cautious about the insider selling at Eagle Bancorp Montana. And we're not picking up on high enough insider ownership to give us any comfort. Of course, the future is what matters most. So if you are interested in Eagle Bancorp Montana, you should check out this free report on analyst forecasts for the company.
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.
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 firstname.lastname@example.org. 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.