It is not uncommon to see companies perform well in the years after insiders buy shares. 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 shareholders might well want to know whether insiders have been buying or selling shares in Ohio Valley Banc Corp. (NASDAQ:OVBC).
What Is Insider Selling?
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 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.’
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The Last 12 Months Of Insider Transactions At Ohio Valley Banc
In the last twelve months, the biggest single sale by an insider was when Director John Jones sold US$769k worth of shares at a price of US$49.94 per share. While the sale doesn’t make us feel confident, we do note it was conducted at a price well above the current share price, which is US$35.05. So it is hard to draw any strong conclusion from it.
In the last twelve months insiders purchased 73.60 shares for US$3.2k. But insiders sold 17.40k shares worth US$836k. All up, insiders sold more shares in Ohio Valley Banc than they bought, over the last year. The average sell price was around US$48.07. We are not joyful about insider selling. However, we do note that the average sale price was significantly higher than the current share price (which is US$35.05). You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
Ohio Valley Banc 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.
Are Ohio Valley Banc Insiders Buying Or Selling?
Insiders bought just US$1.6k worth of shares in that time. That’s not much at all. Looking at the net result, we don’t think these recent trades shed much light on how insiders, as a group, are feeling about the company’s prospects.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Insiders own 6.8% of Ohio Valley Banc shares, worth about US$12m. 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 Ohio Valley Banc Tell Us?
Insider purchases have outweighed sales, in the last three months. But overall the difference isn’t worth writing home about. We don’t take much encouragement from the transactions by Ohio Valley Banc insiders. The modest level of insider ownership is, at least, some comfort. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
But note: Ohio Valley Banc 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.
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 email@example.com.