It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell MutualFirst Financial, Inc. (NASDAQ:MFSF), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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 equally, we would consider it foolish to ignore insider transactions altogether. 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.’
MutualFirst Financial Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when Senior VP & Director Charles Viater sold US$166k worth of shares at a price of US$38.80 per share. Although we don’t gain confidence from insider selling, we note that this large sale was at well above current price of US$24.66. So it is hard to draw any strong conclusion from it.
Over the last year, we note insiders sold 25.54k shares worth US$943k. Over the last year we saw more insider selling of MutualFirst Financial shares, than buying. The sellers received a price of around US$36.91, on average. We are not joyful about insider selling. But we note that the selling, on average, was at well above the recently traded price of US$24.66. The chart below shows insider transactions over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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MutualFirst Financial Insiders Are Selling The Stock
Over the last three months, we’ve seen significant insider selling at MutualFirst Financial. Specifically, Charles Viater ditched US$180k worth of shares in that time, and we didn’t record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
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. I reckon it’s a good sign if insiders own a significant number of shares in the company. It’s great to see that MutualFirst Financial insiders own 12% of the company, worth about US$28m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At MutualFirst Financial Tell Us?
An insider sold stock recently, but they haven’t been buying. Looking to the last twelve months, our data doesn’t show any insider buying. Insiders own shares, but we’re still pretty cautious, given the history of sales. So we’d only buy after careful consideration. Of course, the future is what matters most. So if you are interested in MutualFirst Financial, you should check out this free report on analyst forecasts for the company.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity 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.