Have Insiders Been Buying First United Corporation (NASDAQ:FUNC) Shares?
It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in First United Corporation (NASDAQ:FUNC).
Do Insider Transactions Matter?
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.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.
View our latest analysis for First United
The Last 12 Months Of Insider Transactions At First United
Over the last year, we can see that the biggest insider purchase was by insider John McCullough for US$70k worth of shares, at about US$11.81 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$17.80. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
Over the last year, we can see that insiders have bought 16.49k shares worth US$216k. But insiders sold 0.72 shares worth US$8.1. In total, First United insiders bought more than they sold over the last year. Their average price was about US$13.11. We don't deny that it is nice to see insiders buying stock in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. You can see the insider transactions (by companies and 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!
First United 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.
First United Insiders Bought Stock Recently
Over the last quarter, First United insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought US$53k worth of shares. That shows some optimism about the company's future.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company 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 First United insiders own about US$6.2m worth of shares (which is 5.3% of the company). Whilst better than nothing, we're not overly impressed by these holdings.
What Might The Insider Transactions At First United Tell Us?
It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that First United insiders are expecting a bright future. 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. While conducting our analysis, we found that First United has 1 warning sign and it would be unwise to ignore this.
Of course First United may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
