It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Summit Financial Group, Inc.’s (NASDAQ:SMMF) case, it’s fantastic news for shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
Summit Financial Group Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Director Gary Hinkle bought US$150k worth of shares at a price of US$24.15 per share. That implies that an insider found the current price of US$25.13 per share to be enticing. 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. In this case we’re pleased to report that the insider purchases were made at close to current prices.
While Summit Financial Group insiders bought shares during the last year, they didn’t sell. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Summit Financial Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Summit Financial Group
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. Summit Financial Group insiders own about US$41m worth of shares. That equates to 13% 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 Summit Financial Group Tell Us?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. However, our analysis of transactions over the last year is heartening. Overall we don’t see anything to make us think Summit Financial Group insiders are doubting the company, and they do own shares. So while it’s helpful to know what insiders are doing in terms of buying or selling, it’s also helpful to know the risks that a particular company is facing. For example, Summit Financial Group has 2 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.
But note: Summit Financial Group may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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