Insiders who acquired US$1.6m worth of Fifth Third Bancorp's (NASDAQ:FITB) stock at an average price of US$27.89 in the past 12 months may be dismayed by the recent 4.6% price decline. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth US$1.5m which is not ideal.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At Fifth Third Bancorp
In the last twelve months, the biggest single purchase by an insider was when Independent Director Gary Heminger bought US$1.3m worth of shares at a price of US$26.82 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$25.82). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Happily, we note that in the last year insiders paid US$1.6m for 59.16k shares. But insiders sold 25.95k shares worth US$957k. In the last twelve months there was more buying than selling by Fifth Third Bancorp insiders. 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!
Fifth Third Bancorp is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders At Fifth Third Bancorp Have Bought Stock Recently
Over the last three months, we've seen significantly more insider buying, than insider selling, at Fifth Third Bancorp. Independent Director Gary Heminger spent US$1.3m on stock. On the other hand, Executive VP & Head of Consumer Bank Howard Hammond netted US$73k by selling. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.
Insider Ownership Of Fifth Third Bancorp
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Fifth Third Bancorp insiders own 0.4% of the company, worth about US$78m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Fifth Third Bancorp Insiders?
It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. Insiders likely see value in Fifth Third Bancorp shares, given these transactions (along with notable insider ownership of the company). If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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.
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.
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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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