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We often see insiders buying up shares in companies that perform well over the long term. 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 before you buy or sell Wellesley Bancorp, Inc. ( NASDAQ:WEBK ), you may well want to know whether insiders have been buying or selling.
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, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. 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'.
Wellesley Bancorp Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Chairman, Thomas Fontaine, for US$61k worth of shares, at about US$31.35 per share. That means that even when the share price was below the current price of US$32.99, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling on market, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 3.9% of Thomas Fontaine's holding. Thomas Fontaine was the only individual insider to sell shares in the last twelve months.
In the last twelve months insiders purchased 675 shares for US$22k. But insiders sold 3000 shares worth US$95k. Thomas Fontaine ditched 3000 shares over the year. The average price per share was US$31.57. The chart below shows insider transactions (by 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!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. From our data, it seems that Wellesley Bancorp insiders own 11% of the company, worth about US$9.1m. We do generally prefer see higher levels of insider ownership.
What Might The Insider Transactions At Wellesley Bancorp Tell Us?
The fact that there have been no Wellesley Bancorp insider transactions recently certainly doesn't bother us. We don't take much encouragement from the transactions by Wellesley Bancorp insiders. And usually insiders own more stock in the company, according to our data. To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .
Of course Wellesley 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 aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com . 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.