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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 Riverview Bancorp, Inc. (NASDAQ:RVSB), you may well want to know whether insiders have been buying or selling.
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, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. 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 Riverview Bancorp
Director Patricia Eby made the biggest insider purchase in the last 12 months. That single transaction was for US$124k worth of shares at a price of US$7.72 each. That implies that an insider found the current price of US$8.35 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. In this case we're pleased to report that the insider purchases were made at close to current prices.
Over the last year, we can see that insiders have bought 36795 shares worth US$295k. In the last twelve months Riverview Bancorp insiders were buying shares, but not selling. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Riverview 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.
Riverview Bancorp Insiders Bought Stock Recently
Over the last quarter, Riverview Bancorp insiders have spent a meaningful amount on shares. We can see that Patricia Eby paid US$124k for shares in the company. No-one sold. This makes one think the business has some good points.
Does Riverview 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Riverview Bancorp insiders own about US$14m worth of shares. That equates to 7.3% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Riverview Bancorp Tell Us?
The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. Insiders likely see value in Riverview Bancorp shares, given these transactions (along with notable insider ownership of the company). Of course, the future is what matters most. So if you are interested in Riverview Bancorp, you should check out this free report on analyst forecasts for the company.
But note: Riverview 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 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 email@example.com. 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.