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Should You Be Worried About Insider Transactions At Bryn Mawr Bank Corporation (NASDAQ:BMTC)?

Neil Montgomery

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It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Bryn Mawr Bank Corporation (NASDAQ:BMTC).

What Is Insider Buying?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.

We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’

Check out our latest analysis for Bryn Mawr Bank

Bryn Mawr Bank Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when Chairman of the Board Britton Murdoch sold US$442k worth of shares at a price of US$49.37 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$38.10. So it is hard to draw any strong conclusion from it.

Over the last year we saw more insider selling of Bryn Mawr Bank shares, than buying. The average sell price was around US$48.94. It is certainly not great to see that insiders have sold shares in the company. But we note that the selling, on average, was at well above the recently traded price of US$38.10. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

NASDAQGS:BMTC Insider Trading February 7th 19

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Bryn Mawr Bank Insiders Bought Stock Recently

We saw some Bryn Mawr Bank insider buying shares in the last three months. Director Diego Calderin purchased US$21k worth of shares in that period. It’s great to see that insiders are only buying, not selling. However, in this case the amount invested recently is quite small.

Insider Ownership of Bryn Mawr Bank

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Bryn Mawr Bank insiders own about US$13m worth of shares. That equates to 1.7% 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.

What Might The Insider Transactions At Bryn Mawr Bank Tell Us?

Insider purchases have outweighed sales, in the last three months. But the net investment is not enough to encourage us much. Still, the insider transactions at Bryn Mawr Bank in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some comfort. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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 editorial-team@simplywallst.com.