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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 Old Line Bancshares, Inc. (NASDAQ:OLBK).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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.’
The Last 12 Months Of Insider Transactions At Old Line Bancshares
Joseph Thomas made the biggest insider sale in the last 12 months. That single transaction was for US$691k worth of shares at a price of US$34.86 each. That is hardly a positive sign, even though it took place above the latest price (US$27.32). So it may not tell us anything about how insiders feel about the current share price.
Happily, we note that in the last year insiders paid US$955k for 29.72k shares. But they sold 144.69k for US$5.0m. All up, insiders sold more shares in Old Line Bancshares than they bought, over the last year. The average sell price was around US$34.58. It is certainly not great to see that insiders have sold shares in the company. But we note that the selling, on average, was at well above the recently traded price of US$27.32. The chart below shows insider transactions (by individuals) over the last year. 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.
Old Line Bancshares Insiders Bought Stock Recently
Over the last quarter, Old Line Bancshares insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought US$84k worth of shares. This is a positive in our book as it implies some confidence.
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. Insiders own 13% of Old Line Bancshares shares, worth about US$62m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Old Line Bancshares Tell Us?
The recent insider purchases are heartening. But we can’t say the same for the transactions over the last 12 months. We don’t take much heart from transactions by Old Line Bancshares insiders over the last year. But they own a reasonable amount of the company, and there was some buying recently. In short they are likely aligned with shareholders. Of course, the future is what matters most. So if you are interested in Old Line Bancshares, you should check out this free report on analyst forecasts for the company.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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 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. On rare occasion, data errors may occur. Thank you for reading.