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We often see insiders buying up shares in companies that perform well over the long term. 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 Bank of Hawaii Corporation (NYSE:BOH).
What Is Insider Buying?
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.
We don’t think shareholders should simply follow insider transactions. 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 Bank of Hawaii
Director Barbara Tanabe made the biggest insider sale in the last 12 months. That single transaction was for US$51k worth of shares at a price of US$83.23 each. So we know that an insider sold shares at around the present share price of US$79.15. They might be selling for a variety of reasons, but it’s hard to argue this is a bullish sign. Arguably, insider selling at around current prices should give us reason to reflect on whether the stock is fully valued at the moment.
In the last twelve months insiders netted US$121k for 1.48k shares sold. All up, insiders sold more shares in Bank of Hawaii than they bought, over the last year. The average sell price was around US$81.81. It’s not particularly great to see insiders were selling shares around current prices. 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. By clicking on the graph below, you can see the precise details of each insider transaction!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at Bank of Hawaii Have Sold Stock Recently
Over the last three months, we’ve seen a bit of insider selling at Bank of Hawaii. Barbara Tanabe sold just US$40k worth of shares in that time. It’s not great to see insider selling, nor the lack of recent buyers. But the selling simply isn’t sufficiently substantial to be of much use as a signal.
Insider Ownership of Bank of Hawaii
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 1.8% of Bank of Hawaii shares, worth about US$58m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Bank of Hawaii Insiders?
Insider selling has just outweighed insider buying in the last three months. But the net divestment is not enough to concern us at all. Recent insider selling makes us a little nervous, in light of the broader picture of Bank of Hawaii insider transactions. But we do like the fact that insiders own a fair chunk of the company. Of course, the future is what matters most. So if you are interested in Bank of Hawaii, 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.