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 we’ll take a look at whether insiders have been buying or selling shares in Northfield Bancorp, Inc. (Staten Island, NY) (NASDAQ:NFBK).
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, 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 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.’
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Northfield Bancorp (Staten Island NY) Insider Transactions Over The Last Year
Chairman of the Board John Alexander made the biggest insider sale in the last 12 months. That single transaction was for US$852k worth of shares at a price of US$16.05 each. So we know that an insider sold shares at around the present share price of US$14.29. They might be selling for a variety of reasons, but it’s hard to argue this is a bullish sign. Arguably, insider selling at around current prices should give us reason to reflect on whether the stock is fully valued at the moment.
In the last twelve months insiders purchased 8.50k shares for US$113k. But they sold 387.49k for US$6.3m. In total, Northfield Bancorp (Staten Island NY) insiders sold more than they bought over the last year. The sellers received a price of around US$16.19, on average. It’s not too encouraging to see that insiders have sold at below the current price. Since insiders sell for many reasons, we wouldn’t put too much weight on it. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Northfield Bancorp (Staten Island NY) 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.
Insiders at Northfield Bancorp (Staten Island NY) Have Bought Stock Recently
Over the last three months, we’ve seen significantly more insider buying, than insider selling, at Northfield Bancorp (Staten Island NY). In total, 2 insiders bought US$113k worth of shares in that time. But Executive Vice President of Business Development & Branch Administration Robin Lefkowitz sold shares worth US$28k. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.
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. Northfield Bancorp (Staten Island NY) insiders own about US$37m worth of shares. That equates to 5.3% of the company. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About Northfield Bancorp (Staten Island NY) Insiders?
It is good to see recent purchasing. However, the longer term transactions are not so encouraging. While recent transactions indicate confidence in Northfield Bancorp (Staten Island NY), insiders don’t own enough of the company to overcome our cautiousness about the longer term transactions. Overall they seem reasonably aligned. 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.
Of course Northfield Bancorp (Staten Island NY) may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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 firstname.lastname@example.org.