It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in First Interstate BancSystem, Inc. (NASDAQ:FIBK).
What Is Insider Buying?
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.
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.’
First Interstate BancSystem Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when Director Jonathan Scott sold US$860k worth of shares at a price of US$43.85 per share. That means that an insider was selling shares at around the current price of US$41.74. They might be selling for a variety of reasons, but it’s hard to argue this is a bullish sign. Arguably, insider selling at around current prices should give us reason to reflect on whether the stock is fully valued at the moment.
Over the last year we saw more insider selling of First Interstate BancSystem shares, than buying. The average sell price was around US$42.53. It’s not ideal to see that insiders have sold at around the current price. Since insiders sell for many reasons, we wouldn’t put too much weight on it. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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First Interstate BancSystem Insiders Are Selling The Stock
Over the last three months, we’ve seen significant insider selling at First Interstate BancSystem. In total, Jonathan Scott dumped US$182k worth of shares in that time, and we didn’t record any purchases whatsoever. Overall this makes us a bit cautious, but it’s not the be all and end all.
Many investors like to check how much of a company is owned by insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. First Interstate BancSystem insiders own about US$527m worth of shares (which is 21% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About First Interstate BancSystem Insiders?
An insider hasn’t bought First Interstate BancSystem stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn’t give us much comfort. But since First Interstate BancSystem is profitable and growing, we’re not too worried by this. The company boasts high insider ownership, but we’re a little hesitant, given the history of share sales. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for First Interstate BancSystem.
Of course First Interstate BancSystem may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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