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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. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in BankFinancial Corporation (NASDAQ:BFIN).
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. 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. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.
BankFinancial Insider Transactions Over The Last Year
Notably, that recent purchase by John Manos is the biggest insider purchase of BankFinancial shares that we've seen in the last year. That means that an insider was happy to buy shares at around the current price of US$8.20. Of course they may have changed their mind. But this suggests they are optimistic. 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.
In the last twelve months insiders purchased 7.50k shares for US$61k. On the other hand they divested 3000 shares, for US$37k. In total, BankFinancial insiders bought more than they sold over the last year. The chart below shows insider transactions (by 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!
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.
BankFinancial Insiders Bought Stock Recently
Over the last quarter, BankFinancial insiders have spent a meaningful amount on shares. Overall, two insiders shelled out US$61k for shares in the company -- and none sold. This makes one think the business has some good points.
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. From our data, it seems that BankFinancial insiders own 5.0% of the company, worth about US$6.2m. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
So What Does This Data Suggest About BankFinancial Insiders?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that BankFinancial insiders are expecting a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that BankFinancial is showing 3 warning signs in our investment analysis, and 1 of those is potentially serious...
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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. 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.
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