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Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of First National Corporation (NASDAQ:FXNC), it sends a favourable 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 do think it is perfectly logical to keep tabs on what insiders are doing.
Check out our latest analysis for First National
First National Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Director Kirtesh Patel bought US$117k worth of shares at a price of US$15.56 per share. We do like to see buying, but this purchase was made at well below the current price of US$22.74. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
First National insiders may have bought shares in the last year, but they didn't sell any. 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!
First National is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. First National insiders own about US$28m worth of shares. That equates to 14% 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.
So What Does This Data Suggest About First National Insiders?
The fact that there have been no First National insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in First National and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing First National. In terms of investment risks, we've identified 2 warning signs with First National and understanding these should be part of your investment process.