The recent price decline of 11% in Washington Trust Bancorp, Inc.'s (NASDAQ:WASH) stock may have disappointed insiders who bought US$55.0k worth of shares at an average price of US$44.01 in the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth US$27.2k, which is not great.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At Washington Trust Bancorp
The Independent Director Constance Howes made the biggest insider purchase in the last 12 months. That single transaction was for US$55k worth of shares at a price of US$44.01 each. That means that even when the share price was higher than US$21.78 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Constance Howes was the only individual insider to buy during the last year.
The chart below shows insider transactions (by companies and 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!
Washington Trust Bancorp is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Have Washington Trust Bancorp Insiders Traded Recently?
In the last quarter President & COO Mary Noons sold US$21.0 worth of equity. That's not a lot. Looking at the net result, we don't think this recent trading sheds much light on how insiders, as a group, are feeling about the company's prospects.
Does Washington Trust Bancorp Boast High Insider Ownership?
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. A high insider ownership often makes company leadership more mindful of shareholder interests. From our data, it seems that Washington Trust Bancorp insiders own 1.8% of the company, worth about US$6.7m. We do generally prefer see higher levels of insider ownership.
So What Does This Data Suggest About Washington Trust Bancorp Insiders?
While there has not been any insider buying in the last three months, there has been selling. But the sales were small, so we're not concerned. On a brighter note, the transactions over the last year are encouraging. The transactions are fine but it'd be more encouraging if Washington Trust Bancorp insiders bought more shares in the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 1 warning sign with Washington Trust Bancorp and understanding this should be part of your investment process.
But note: Washington Trust Bancorp may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.