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 Sierra Bancorp (NASDAQ:BSRR), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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 logic dictates you should pay some attention to whether insiders are buying or selling shares. 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.’
Sierra Bancorp Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by Director Gordon Woods for US$221k worth of shares, at about US$29.55 per share. So we know that an insider sold shares at around the present share price of US$25.99. 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. Gordon Woods was the only individual insider to sell over the last year.
Happily, we note that in the last year insiders paid US$77k for 2.73k shares. But they sold 7.50k for US$221k. You can see a visual depiction of insider transactions over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insider Ownership of Sierra Bancorp
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. Sierra Bancorp insiders own about US$34m worth of shares (which is 8.4% 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.
What Might The Insider Transactions At Sierra Bancorp Tell Us?
It doesn’t really mean much that no insider has traded Sierra Bancorp shares in the last quarter. The insider transactions at Sierra Bancorp are not very heartening. But it’s good to see that insiders own shares in the company. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Sierra Bancorp.
But note: Sierra Bancorp 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.