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Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Southern Missouri Bancorp, Inc. (NASDAQ:SMBC), that sends out a positive message to the company's shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
Southern Missouri Bancorp Insider Transactions Over The Last Year
In fact, the recent purchase by David Tooley was the biggest purchase of Southern Missouri Bancorp shares made by an insider individual in the last twelve months, according to our records. That implies that an insider found the current price of US$43.97 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the Southern Missouri Bancorp insiders decided to buy shares at close to current prices.
Happily, we note that in the last year insiders paid US$275k for 6.50k shares. But insiders sold 2.29k shares worth US$127k. In total, Southern Missouri Bancorp insiders bought more than they sold over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Southern Missouri Bancorp Insiders Bought Stock Recently
There has been significantly more insider buying, than selling, at Southern Missouri Bancorp, over the last three months. Insiders spent US$275k on shares. But we did see Executive VP & Chief Strategies Officer Brett Dorton sell shares worth US$20k. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.
Insider Ownership of Southern Missouri Bancorp
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Southern Missouri Bancorp insiders own about US$73m worth of shares. That equates to 18% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Southern Missouri Bancorp Tell Us?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. Given that insiders also own a fair bit of Southern Missouri Bancorp we think they are probably pretty confident of a bright future. 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. Case in point: We've spotted 2 warning signs for Southern Missouri Bancorp you should be aware of.
Of course Southern Missouri Bancorp may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.