It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Sound Financial Bancorp, Inc. ( NASDAQ:SFBC ).
What Is Insider Selling?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
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. 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.'
Sound Financial Bancorp Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Vice Chairman of the Board, David Haddad, for US$68k worth of shares, at about US$38.05 per share. So what is clear is that an insider saw fit to sell at around the current price of US$33.86. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.
All up, insiders sold more shares in Sound Financial Bancorp than they bought, over the last year. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like Sound Financial Bancorp better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Sound Financial Bancorp Insiders Are Selling The Stock
We've seen more insider selling than insider buying at Sound Financial Bancorp recently. We note Director Robert Carney cashed in US$65k worth of shares. Meanwhile Director Kathleen Cook bought US$1.7k worth, as we said above. Because the selling vastly outweighs the buying, we'd say this is a somewhat bearish sign.
Insider Ownership of Sound Financial Bancorp
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. From our data, it seems that Sound Financial Bancorp insiders own 9.1% of the company, worth about US$7.8m. We do generally prefer see higher levels of insider ownership.
So What Do The Sound Financial Bancorp Insider Transactions Indicate?
Unfortunately, there has been more insider selling of Sound Financial Bancorp stock, than buying, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. On the plus side, Sound Financial Bancorp makes money, and is growing profits. When you combine this with the relatively low insider ownership, we are very cautious about the stock. As the saying goes, only fools rush in. 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.
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