Yahoo Finance Farmers & Merchants Bancorp, Inc. (NASDAQ:FMAO) Insiders Have Been Selling
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We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Farmers & Merchants Bancorp, Inc. (NASDAQ:FMAO), 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, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
View our latest analysis for Farmers & Merchants Bancorp
The Last 12 Months Of Insider Transactions At Farmers & Merchants Bancorp
Director Paul Siebenmorgen made the biggest insider sale in the last 12 months. That single transaction was for US$271k worth of shares at a price of US$42.50 each. That is hardly a positive sign, even though it took place above the latest price (US$31.50). So it is hard to draw any strong conclusion from it.
In the last twelve months insiders netted US$719k for 17.00k shares sold. Over the last year we saw more insider selling of Farmers & Merchants Bancorp shares, than buying. They sold for an average price of about US$42.30. It is certainly not great to see that insiders have sold shares in the company. But the selling was at much higher prices than the current share price (US$31.50), so it probably doesn’t tell us a lot about the value on offer today. You can see the insider transactions (by 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!
I will like Farmers & Merchants 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.
Insider Ownership of Farmers & Merchants 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. We usually like to see fairly high levels of insider ownership. Insiders own 10% of Farmers & Merchants Bancorp shares, worth about US$35m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Farmers & Merchants Bancorp Insider Transactions Indicate?
The fact that there have been no Farmers & Merchants Bancorp insider transactions recently certainly doesn’t bother us. Our analysis of Farmers & Merchants Bancorp insider transactions leaves us cautious. The modest level of insider ownership is, at least, some comfort. Of course, the future is what matters most. So if you are interested in Farmers & Merchants Bancorp, you should check out this free report on analyst forecasts for the company.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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 editorial-team@simplywallst.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. On rare occasion, data errors may occur. Thank you for reading.
