We often see insiders buying up shares in companies that perform well over the long term. 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 before you buy or sell First United Corporation (NASDAQ:FUNC), you may well want to know whether insiders have been buying or selling.
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.
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.’
First United Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when Robert Fisher sold US$127k worth of shares at a price of US$23.65 per share. While the sale doesn’t make us feel confident, we do note it was conducted at a price well above the current share price, which is US$16.50. So it is hard to draw any strong conclusion from it. Notably Robert Fisher was also the biggest buyer, having purchased US$123k worth of shares.
Happily, we note that in the last year insiders paid US$123k for 5.84k shares. On the other hand they divested 18.56k shares, for US$368k. Over the last year we saw more insider selling of First United shares, than buying. They sold for an average price of about US$19.84. Insider selling doesn’t make us excited to buy. But we note that the selling, on average, was at well above the recently traded price of US$16.50. 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!
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 First United Have Bought Stock Recently
There was some insider buying at First United over the last quarter. Insiders purchased US$36k worth of shares in that period. We like it when there are only buyers, and no sellers. However, in this case the amount invested recently is quite small.
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. From our data, it seems that First United insiders own 4.4% of the company, worth about US$5.1m. Overall, this level of ownership isn’t that impressive, but it’s certainly better than nothing!
So What Does This Data Suggest About First United Insiders?
We note a that there has been a tad more insider buying than selling, recently. But the net investment is not enough to encourage us much. Our analysis of First United insider transactions leaves us unenthusiastic. And usually insiders own more stock in the company, according to our data. To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .
Of course First United may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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 firstname.lastname@example.org.