We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Northrim BanCorp, Inc. (NASDAQ:NRIM).
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, 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 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 Northrim BanCorp
Over the last year, we can see that the biggest insider sale was by the Director, David Wight, for US$88k worth of shares, at about US$44.15 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$35.47. So it may not tell us anything about how insiders feel about the current share price. David Wight was the only individual insider to sell over the last year.
In the last twelve months insiders purchased 7559 shares for US$268k. On the other hand they divested 2000 shares, for US$88k. In total, Northrim BanCorp insiders bought more than they sold over the last year. 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!
Northrim BanCorp is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Northrim BanCorp Have Bought Stock Recently
Over the last quarter, Northrim BanCorp insiders have spent a meaningful amount on shares. In total, insiders bought US$134k worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.
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. From looking at our data, insiders own US$3.9m worth of Northrim BanCorp stock, about 1.7% of the company. We prefer to see high levels of insider ownership.
So What Do The Northrim BanCorp Insider Transactions Indicate?
The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Northrim BanCorp insiders are reasonably well aligned, and optimistic for the future. Along with insider transactions, I recommend checking if Northrim BanCorp is growing revenue. This free chart of historic revenue and earnings should make that easy.
Of course Northrim BanCorp may not be the best stock to buy. So you may wish to see this free collection of high quality 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.
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