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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. 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 we'll take a look at whether insiders have been buying or selling shares in FFBW, Inc. (NASDAQ:FFBW).
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, most countries require that the company discloses such transactions to the market.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.
FFBW Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when insider Warren Mackey bought US$250k worth of shares at a price of US$10.00 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$8.99). 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. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months FFBW insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insiders at FFBW Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at FFBW. Overall, three insiders shelled out US$63k for shares in the company -- and none sold. This makes one think the business has some good points.
Insider Ownership of FFBW
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Our data suggests FFBW insiders own 3.7% of the company, worth about US$2.4m. We prefer to see high levels of insider ownership.
So What Does This Data Suggest About FFBW Insiders?
It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on FFBW stock. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that FFBW has 2 warning signs and it would be unwise to ignore them.
But note: FFBW 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, but not derivative transactions.
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.
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. Thank you for reading.