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 VersaBank (TSE:VB), 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 would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At VersaBank
Over the last year, we can see that the biggest insider purchase was by President David Taylor for CA$310k worth of shares, at about CA$11.55 per share. We do like to see buying, but this purchase was made at well below the current price of CA$13.25. 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.
Over the last year, we can see that insiders have bought 118.35k shares worth CA$1.2m. On the other hand they divested 700.00 shares, for CA$7.9k. Overall, VersaBank insiders were net buyers during the last year. The average buy price was around CA$10.27. It is certainly positive to see that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. 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!
VersaBank is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders at VersaBank Have Bought Stock Recently
There was some insider buying at VersaBank over the last quarter. Insiders shelled out CA$50k for shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. However, in this case the amount invested recently is quite small.
Insider Ownership of VersaBank
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. It appears that VersaBank insiders own 15% of the company, worth about CA$41m. 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 Do The VersaBank Insider Transactions Indicate?
Insider purchases may have been minimal, in the last three months, but there was no selling at all. The net investment is not enough to encourage us much. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think VersaBank insiders are doubting the company, and they do own shares. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for VersaBank.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.