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 German American Bancorp, Inc. (NASDAQ:GABC).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. 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 German American Bancorp
In the last twelve months, the biggest single purchase by an insider was when Director Christopher Ramsey bought US$1.0m worth of shares at a price of US$36.85 per share. So it’s clear an insider wanted to buy, even at a higher price. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. It’s not at all bad to see insiders buy shares at or above current prices.
In the last twelve months insiders paid US$1.6m for 43.81k shares purchased. In total, German American Bancorp insiders bought more than they sold over the last year. They paid about US$35.40 on average. These transactions suggest that insiders have considered the current price of US$28.95 attractive. You can see the insider transactions over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
German American Bancorp Insiders Bought Stock Recently
It’s good to see that German American Bancorp insiders have made notable investments in the company’s shares. Not only was there no selling that we can see, but they collectively bought US$355k worth of shares. This makes one think the business has some good points.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. German American Bancorp insiders own 6.6% of the company, currently worth about US$47m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The German American Bancorp Insider Transactions Indicate?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. Insiders likely see value in German American Bancorp shares, given these transactions (along with notable insider ownership 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.
But note: German American 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.
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 email@example.com.