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 we’ll take a look at whether insiders have been buying or selling shares in Wellesley Bancorp, Inc. ( NASDAQ:WEBK ).
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, such insiders must disclose their trading activities, and not trade on inside information.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
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Wellesley Bancorp Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when Chairman Thomas Fontaine sold US$61k worth of shares at a price of US$31.35 per share. So we know that an insider sold shares at around the present share price of US$28.03. They could have a variety of motivations for selling, but it’s still not particularly encouraging to see. We generally tread carefully if insiders have been selling on market, even if they sold slightly above the current price. Thomas Fontaine was the only individual insider to sell shares in the last twelve months.
Happily, we note that in the last year insiders paid US$22k for 675.00 shares. On the other hand they divested 3.00k shares, for US$95k. Thomas Fontaine sold a total of 3.00k shares over the year at an average price of US$31.57. You can see the insider transactions (by individuals) over the last year depicted in the chart 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.
Wellesley Bancorp Insiders Are Selling The Stock
We have seen a bit of insider selling at Wellesley Bancorp, over the last three months. Thomas Fontaine sold US$61k worth of shares in that time. But (as above)at least we saw US$22k worth of buying. While it’s not great to see insider selling, the net amount sold isn’t enough for us to want to read anything into it.
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. From our data, it seems that Wellesley Bancorp insiders own 13% of the company, worth about US$8.5m. Whilst better than nothing, we’re not overly impressed by these holdings.
So What Do The Wellesley Bancorp Insider Transactions Indicate?
We note a that there’s been a little more insider selling than buying, recently. But the net divestment is not enough to concern us at all. Recent sales exacerbate our caution arising from analysis of Wellesley Bancorp insider transactions. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph .
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 email@example.com .