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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 before you buy or sell First Savings Financial Group, Inc. (NASDAQ:FSFG), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
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.
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.'
The Last 12 Months Of Insider Transactions At First Savings Financial Group
Over the last year, we can see that the biggest insider sale was by the COO, Corporate Secretary & Director, John Lawson, for US$250k worth of shares, at about US$50.45 per share. That means that even when the share price was below the current price of US$58.00, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 14.3% of John Lawson's holding.
Over the last year, we can see that insiders have bought 2878.77 shares worth US$154k. On the other hand they divested 14906 shares, for US$840k. All up, insiders sold more shares in First Savings Financial Group than they bought, over the last year. 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!
I will like First Savings Financial Group better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
First Savings Financial Group Insiders Bought Stock Recently
Over the last three months, we've seen a bit of insider buying at First Savings Financial Group. They bought US$100k worth in that time. However, Director Samuel Eckart netted US$65k for sales. While it's good to see the insider buying, the net amount bought isn't enough for us to gain much confidence from it.
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. It appears that First Savings Financial Group insiders own 19% of the company, worth about US$26m. 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 First Savings Financial Group Tell Us?
We note a that there has been a bit of insider buying recently (but no selling). That said, the purchases were not large. Recent insider selling makes us a little nervous, in light of the broader picture of First Savings Financial Group insider transactions. But we do like the fact that insiders own a fair chunk of 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 First Savings Financial Group 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 firstname.lastname@example.org. 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.