Yahoo Finance Did An Insider Sell Their Shares In Brookline Bancorp Inc (NASDAQ:BRKL)?
Brookline Bancorp, Inc. operates as the holding company for Brookline Bank, Bank Rhode Island, First Ipswich Bank, and Brookline Securities Corp that provide commercial, business, and retail banking services to corporate, municipal, and retail customers in the United States. Brookline Bancorp is one of United States’s large-cap stocks that saw some insider selling over the past three months, with insiders divesting from 12.25k shares during this period. Generally, insiders selling shares in their own firm sends a bearish signal. The MIT Press (1998) published an article showing that stocks following insider selling underperformed the market by 2.7%. But these signals may not be sufficient to gain confidence on whether to divest. Today we will evaluate whether these decisions are bolstered by analysts’ expectations of future growth as well as recent share price movements.
View our latest analysis for Brookline Bancorp
Who Are Selling Their Shares?
More shares have been sold than bought by Brookline Bancorp’s insiders in the past three months. In total, individual insiders own over 2.09 million shares in the business, which makes up around 2.6% of total shares outstanding. Insiders that have recently trimmed down their holdings are David Chapin (management) , James Cosman (board member) and M. Rose (management) .
Does Selling Activity Reflect Future Growth?
Analysts’ expectations for earnings over the next 3 years of 51.4% provides a strong outlook going forward. But this is not consistent with the signal company insiders are sending with their net selling activity. Delving deeper into the line items, analysts anticipate a limited level of revenue growth next year, although a significantly greater rate of earnings growth. This could indicate large cost-cutting initiatives by the company to boost its earnings. This may not be seen as a maintainable practice by insiders, who may expect a deterioration in earnings to reflect lower revenues growth in the future. Or they may merely view the stock as overvalued by the market which provides a suitable time to sell.
Did Insiders Sell On Share Price Volatility?
Another factor we should consider is whether the timing of these insider transactions coincide with any significant share price movements. Volatility provides an opportunity to trade on market inefficiencies when the stock is under-priced compared to the stock’s intrinsic value. Within the past three months, Brookline Bancorp’s share price traded at a high of $19.25 and a low of $17.7. This indicates a trivial share price movement, with a change of 8.76%. Potentially, insider transactions are not share price related but may be due to their belief on what will happen to the company in the future or simply just personal cash and diversification needs.
Next Steps:
Brookline Bancorp’s insiders’ meaningful divestments tells us that their shares have recently fallen out of favour, however, this is rather cautious relative to analysts’ earnings expectation, and the share price movement may be too trivial to cash in on any mispricing. But we must also be aware that insiders divesting may not actually be based their views on the company’s outlook. Moreover, while insider selling can be a useful prompt, following the lead of an insider, however, will never replace diligent research. I’ve put together two important aspects you should further examine:
Financial Health: Does Brookline Bancorp have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Other High Quality Alternatives : Are there other high quality stocks you could be holding instead of Brookline Bancorp? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing!
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
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.
