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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. 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 Chemung Financial Corporation (NASDAQ:CHMG).
What Is Insider Buying?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. 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 Chemung Financial
In the last twelve months, the biggest single sale by an insider was when Director Robert Dalrymple sold US$213k worth of shares at a price of US$42.57 per share. So it’s clear an insider wanted to take some cash off the table, even below the current price of US$46.58. Even though it doesn’t necessarily mean anything, that’s certainly not a positive sign, in our book. When an insider sells below the current price, it does tend to make us wonder about the current valuation. It is worth noting that this sale was only 1.9% of Robert Dalrymple’s holding.
Happily, we note that in the last year insiders paid US$122k for 2.85k shares. But insiders sold 12.99k shares worth US$566k. All up, insiders sold more shares in Chemung Financial than they bought, over the last year. The average sell price was around US$43.61. It’s not particularly great to see insiders were selling shares at below recent 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insiders at Chemung Financial Have Bought Stock Recently
Over the last three months, we’ve seen a bit of insider buying at Chemung Financial. In total, insiders bought US$63k worth of shares in that time. On the other hand, Chief Risk Officer & Executive VP Karen Makowski sold US$24k worth of shares. It is nice to see that insiders have bought, but the quantum isn’t large enough to get us excited.
Does Chemung Financial Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Chemung Financial insiders own about US$46m worth of shares. That equates to 21% of the company. 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 Chemung Financial Insiders?
Our data shows a little more insider buying than selling in the last three months. But overall the difference isn’t worth writing home about. Recent sales exacerbate our caution arising from analysis of Chemung Financial insider transactions. But it’s good to see that insiders own shares in the company. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course Chemung Financial may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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 email@example.com. 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.