Several Insiders Invested In Heritage Commerce Flagging Positive News
When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Heritage Commerce Corp's (NASDAQ:HTBK) instance, it's good news for shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for Heritage Commerce
Heritage Commerce Insider Transactions Over The Last Year
The Independent Chairman of the Board Jack Conner made the biggest insider purchase in the last 12 months. That single transaction was for US$76k worth of shares at a price of US$7.61 each. So it's clear an insider wanted to buy, at around the current price, which is US$8.30. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. In this case we're pleased to report that the insider purchases were made at close to current prices. We note that Jack Conner was both the biggest buyer and the biggest seller.
Happily, we note that in the last year insiders paid US$157k for 18.66k shares. But insiders sold 6.94k shares worth US$62k. In the last twelve months there was more buying than selling by Heritage Commerce insiders. Their average price was about US$8.39. I'd consider this a positive as it suggests insiders see value at around the current price. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Heritage Commerce is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders At Heritage Commerce Have Sold Stock Recently
The last quarter saw substantial insider selling of Heritage Commerce shares. In total, Independent Chairman of the Board Jack Conner dumped US$62k 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.
Insider Ownership Of Heritage Commerce
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Heritage Commerce insiders own about US$20m worth of shares. That equates to 4.0% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Heritage Commerce Insiders?
An insider hasn't bought Heritage Commerce stock in the last three months, but there was some selling. But we take heart from prior transactions. We like that insiders own a fair amount of the company. So the recent selling doesn't worry us too much. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we've identified 1 warning sign with Heritage Commerce and understanding it should be part of your investment process.
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.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
