Several Insiders Invested In SmartFinancial Flagging Positive News \
Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of SmartFinancial, Inc. (NASDAQ:SMBK), it sends a favourable message to the company's 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.
See our latest analysis for SmartFinancial
SmartFinancial Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Director Cathy Ackermann bought US$289k worth of shares at a price of US$28.99 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$20.40). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
Happily, we note that in the last year insiders paid US$498k for 20.02k shares. On the other hand they divested 16.93k shares, for US$439k. In the last twelve months there was more buying than selling by SmartFinancial insiders. The average buy price was around US$24.86. I'd consider this a positive as it suggests insiders see value at around the current price. You can see a visual depiction of insider transactions (by companies and 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
SmartFinancial Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at SmartFinancial. In total, insiders bought US$170k worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.
Does SmartFinancial Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. SmartFinancial insiders own about US$55m worth of shares. That equates to 16% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The SmartFinancial Insider Transactions Indicate?
It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. Insiders likely see value in SmartFinancial shares, given these transactions (along with notable insider ownership of the company). So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. While conducting our analysis, we found that SmartFinancial has 1 warning sign and it would be unwise to ignore this.
But note: SmartFinancial 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.
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, but not derivative transactions.
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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.
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