It is not uncommon to see companies perform well in the years after insiders buy shares. 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 Fidelity D & D Bancorp, Inc. (NASDAQ:FDBC).
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.
We don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. 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 Fidelity D & D Bancorp
In the last twelve months, the biggest single sale by an insider was when Chief Lending Officer and Senior EVP of Fidelity Deposit & Discount Bank Timothy O’Brien sold US$126k worth of shares at a price of US$65.32 per share. That means that an insider was selling shares at around the current price of US$57.00. They might be selling for a variety of reasons, but it’s hard to argue this is a bullish sign. We generally tread carefully if insiders have been selling on market, even if they sold slightly above the current price.
Over the last year, we can see that insiders have bought 940.38 shares worth US$57k. On the other hand they divested 2.34k shares, for US$146k. Over the last year we saw more insider selling of Fidelity D & D Bancorp shares, than buying. The sellers received a price of around US$62.58, on average. It’s not particularly great to see insiders were selling shares around current prices. But we don’t put too much weight on the insider selling, since sellers could have personal reasons. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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Insiders at Fidelity D & D Bancorp Have Bought Stock Recently
We saw some Fidelity D & D Bancorp insider buying shares in the last three months. They bought US$57k worth in that time. On the other hand, Chief Business Development Officer & Executive VP of Fidelity Deposit and Discount Bank Michael Pacyna sold US$15k worth of shares. It is nice to see that insiders have bought, but the quantum isn’t large enough to get us excited.
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. We usually like to see fairly high levels of insider ownership. Fidelity D & D Bancorp insiders own about US$57m worth of shares. That equates to 26% 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 Do The Fidelity D & D Bancorp Insider Transactions Indicate?
Our data shows a little more insider buying than selling in the last three months. But the net investment is not enough to encourage us much. Recent sales exacerbate our caution arising from analysis of Fidelity D & D Bancorp insider transactions. The modest level of insider ownership is, at least, some comfort. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
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.
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