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When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in First National Corporation's (NASDAQ:FXNC) instance, it's good news for shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At First National
Over the last year, we can see that the biggest insider purchase was by Independent Director Kirtesh Patel for US$94k worth of shares, at about US$17.99 per share. That means that even when the share price was higher than US$16.76 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Over the last year, we can see that insiders have bought 5.40k shares worth US$98k. But they sold 2.20k shares for US$49k. In the last twelve months there was more buying than selling by First National insiders. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
First National is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
First National Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at First National. Specifically, Independent Director Kirtesh Patel bought US$94k worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.
Does First National 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. It appears that First National insiders own 16% of the company, worth about US$17m. 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 First National Tell Us?
The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. Given that insiders also own a fair bit of First National we think they are probably pretty confident of a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing First National. At Simply Wall St, we found 2 warning signs for First National that deserve your attention before buying any shares.
Of course First National 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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