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 we'll take a look at whether insiders have been buying or selling shares in 1st Constitution Bancorp (NASDAQ:FCCY).
Do Insider Transactions Matter?
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.
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.'
The Last 12 Months Of Insider Transactions At 1st Constitution Bancorp
The Executive VP and Chief Lending & Credit Officer, John Andreacio, made the biggest insider sale in the last 12 months. That single transaction was for US$106k worth of shares at a price of US$17.92 each. That means that an insider was selling shares at around the current price of US$17.41. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern. John Andreacio was the only individual insider to sell over the last year.
In the last twelve months insiders purchased 5501 shares for US$108k. But insiders sold 8740 shares worth US$159k. John Andreacio divested 8740 shares over the last 12 months at an average price of US$18.18. You can see the insider transactions (by 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!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
1st Constitution Bancorp Insiders Are Selling The Stock
There was substantially more insider selling, than buying, of 1st Constitution Bancorp shares over the last three months. In that time, John Andreacio dumped US$121k worth of shares. On the other hand we note Chairman of the Board Charles Crow bought US$8.9k worth of shares. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the shares are not cheap.
Insider Ownership of 1st Constitution Bancorp
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Insiders own 14% of 1st Constitution Bancorp shares, worth about US$21m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The 1st Constitution Bancorp Insider Transactions Indicate?
The insider sales have outweighed the insider buying, at 1st Constitution Bancorp, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. But it is good to see that 1st Constitution Bancorp is growing earnings. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! Of course, the future is what matters most. So if you are interested in 1st Constitution Bancorp, you should check out this free report on analyst forecasts for the company.
Of course 1st Constitution 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.
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. Thank you for reading.