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We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in S&T Bancorp, Inc. (NASDAQ:STBA).
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'.
S&T Bancorp Insider Transactions Over The Last Year
The Independent Director Jerry Hostetter made the biggest insider purchase in the last 12 months. That single transaction was for US$102k worth of shares at a price of US$20.38 each. That means that an insider was happy to buy shares at around the current price of US$22.64. That means they have been optimistic about the company in the past, though they may have changed their mind. 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. Happily, the S&T Bancorp insiders decided to buy shares at close to current prices.
Over the last year, we can see that insiders have bought 5.90k shares worth US$124k. But insiders sold 1.77k shares worth US$66k. In total, S&T Bancorp insiders bought more than they sold over the last year. 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!
S&T Bancorp is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at S&T Bancorp Have Bought Stock Recently
It's good to see that S&T Bancorp insiders have made notable investments in the company's shares. In total, insiders bought US$115k worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.
Insider Ownership of S&T Bancorp
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that S&T Bancorp insiders own 2.5% of the company, worth about US$22m. 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 Does This Data Suggest About S&T Bancorp Insiders?
It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest S&T Bancorp insiders are well aligned, and that they may think the share price is too low. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing S&T Bancorp. For example - S&T Bancorp has 2 warning signs we think you should be aware of.
Of course S&T Bancorp may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.
This article by Simply Wall St is general in nature. 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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