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We often see insiders buying up shares in companies that perform well over the long term. 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 Farmers National Banc Corp. (NASDAQ:FMNB).
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 logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
The Last 12 Months Of Insider Transactions At Farmers National Banc
The Senior EVP & Chief Banking Officer of Farmers Bank, Mark Witmer, made the biggest insider sale in the last 12 months. That single transaction was for US$108k worth of shares at a price of US$15.30 each. So what is clear is that an insider saw fit to sell at around the current price of US$13.90. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive). Mark Witmer was the only individual insider to sell over the last year.
Over the last year, we can see that insiders have bought 27032 shares worth US$369k. But they sold 27644 for US$427k. Mark Witmer sold a total of 27644 shares over the year at an average price of US$15.44. 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!
I will like Farmers National Banc better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders at Farmers National Banc Have Bought Stock Recently
It's good to see that Farmers National Banc insiders have made notable investments in the company's shares. Overall, six insiders shelled out US$68k for shares in the company -- and none sold. That shows some optimism about the company's future.
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Farmers National Banc insiders own 8.9% of the company, worth about US$34m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Farmers National Banc Tell Us?
It is good to see recent purchasing. However, the longer term transactions are not so encouraging. While recent transactions indicate confidence in Farmers National Banc, insiders don't own enough of the company to overcome our cautiousness about the longer term transactions. Overall they seem reasonably aligned. Of course, the future is what matters most. So if you are interested in Farmers National Banc, you should check out this free report on analyst forecasts for the company.
Of course Farmers National Banc may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.