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Insiders who bought US$488.5k worth of Patriot National Bancorp, Inc.'s (NASDAQ:PNBK) stock at an average buy price of US$1.90 over the last year may be disappointed by the recent 18% decrease in the stock. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth US$408.8k, which is not what they expected.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
View our latest analysis for Patriot National Bancorp
Patriot National Bancorp Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when insider Don Blackhurst bought US$488k worth of shares at a price of US$1.90 per share. That means that an insider was happy to buy shares at above the current price of US$1.59. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. The only individual insider to buy over the last year was Don Blackhurst.
The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Patriot National Bancorp is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Does Patriot National Bancorp Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 23% of Patriot National Bancorp shares, worth about US$1.5m. 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 Patriot National Bancorp Tell Us?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. Insiders likely see value in Patriot National Bancorp shares, given these transactions (along with notable insider ownership of the company). So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 2 warning signs for Patriot National Bancorp you should be aware of, and 1 of these can't be ignored.