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It is not uncommon to see companies perform well in the years after insiders buy shares. 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 shareholders might well want to know whether insiders have been buying or selling shares in RBB Bancorp (NASDAQ:RBB).
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 on the market. However, rules govern insider transactions, and certain disclosures are required.
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.'
RBB Bancorp Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when James W. Kao bought US$188k worth of shares at a price of US$18.80 per share. That means that an insider was happy to buy shares at around the current price of US$19.07. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the RBB Bancorp insiders decided to buy shares at close to current prices.
In the last twelve months insiders purchased 18000 shares for US$341k. On the other hand they divested 1000 shares, for US$20k. Overall, RBB Bancorp insiders were net buyers 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!
RBB 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.
RBB Bancorp Insiders Bought Stock Recently
Over the last quarter, RBB Bancorp insiders have spent a meaningful amount on shares. We can see that James W. Kao paid US$300k for shares in the company. No-one sold. This is a positive in our book as it implies some confidence.
Does RBB Bancorp Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. RBB Bancorp insiders own 38% of the company, currently worth about US$144m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About RBB Bancorp Insiders?
It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest RBB Bancorp insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! Of course, the future is what matters most. So if you are interested in RBB Bancorp, you should check out this free report on analyst forecasts for the company.
But note: RBB 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.