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 Commonwealth Financial Corporation (NYSE:FCF).
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, such insiders must disclose their trading activities, and not trade on inside information.
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. For example, a Colombia 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 First Commonwealth Financial
Over the last year, we can see that the biggest insider sale was by President Thomas Price for US$789k worth of shares, at about US$15.75 per share. So what is clear is that an insider saw fit to sell at around the current price of US$11.92. They could have a variety of motivations for selling, but it’s still not particularly encouraging to see. We usually pause to reflect on the potential that a stock has a high valuation, if insiders have been selling at around the current price. Thomas Price was the only individual insider to sell over the last year.
Happily, we note that in the last year insiders paid US$164k for 13.17k shares. But they sold 50.13k for US$789k. You can see a visual depiction of insider transactions over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
First Commonwealth Financial is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
First Commonwealth Financial Insiders Bought Stock Recently
It’s good to see that First Commonwealth Financial insiders have made notable investments in the company’s shares. In total, insiders bought US$164k worth of shares in that time, and we didn’t record any sales whatsoever. This is a positive in our book as it implies some confidence.
Does First Commonwealth Financial Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. First Commonwealth Financial insiders own 1.4% of the company, currently worth about US$16m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About First Commonwealth Financial Insiders?
The recent insider purchases are heartening. On the other hand the transaction history, over the last year, isn’t so positive. While recent transactions indicate confidence in First Commonwealth Financial, insiders don’t own enough of the company to overcome our cautiousness about the longer term transactions. In short they are likely aligned with shareholders. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
But note: First Commonwealth Financial 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.