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It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell American National Bankshares Inc. (NASDAQ:AMNB), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. 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.’
American National Bankshares Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when F. Hornaday sold US$147k worth of shares at a price of US$39.26 per share. That means that an insider was selling shares at around the current price of US$34.02. While their view may have changed since the sale, this is not a particularly positive fact. We usually pause to reflect on the potential that a stock has a high valuation, if insiders have been selling at around the current price.
In the last twelve months insiders purchased 6.76k shares for US$238k. On the other hand they divested 6.71k shares, for US$257k. Over the last year we saw more insider selling of American National Bankshares shares, than buying. The sellers received a price of around US$38.31, on average. We don’t gain much confidence from insider selling near the recent share price. Since insiders sell for many reasons, we wouldn’t put too much weight on it. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
American National 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 American National Bankshares Have Bought Stock Recently
At American National Bankshares,over the last quarter, we have observed quite a lot more insider buying than insider selling. In total, 2 insiders bought US$101k worth of shares in that time. But Executive VP & Chief Banking Officer H. Strader sold shares worth US$30k. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.
Insider Ownership of American National Bankshares
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. It appears that American National Bankshares insiders own 6.2% of the company, worth about US$19m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At American National Bankshares Tell Us?
The recent insider purchases are heartening. But we can’t say the same for the transactions over the last 12 months. The more recent transactions are a positive, but American National Bankshares insiders haven’t shown the sustained enthusiasm that we look for, although they do own a decent number of shares, overall. So they seem pretty well aligned, overall. Of course, the future is what matters most. So if you are interested in American National Bankshares, 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.
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.