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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 Chemung Financial Corporation (NASDAQ:CHMG), that sends out a positive message to the company's shareholders.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
Chemung Financial Insider Transactions Over The Last Year
The Independent Director, Robert Dalrymple, made the biggest insider sale in the last 12 months. That single transaction was for US$151k worth of shares at a price of US$42.87 each. That means that an insider was selling shares at slightly below the current price (US$45.54). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 1.4% of Robert Dalrymple's holding.
Happily, we note that in the last year insiders paid US$304k for 6.95k shares. But they sold 4.77k shares for US$204k. In total, Chemung Financial insiders bought more than they sold over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Chemung Financial is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Chemung Financial Insiders Bought Stock Recently
It's good to see that Chemung Financial insiders have made notable investments in the company's shares. Independent Director Jeffrey Streeter spent US$252k on stock, and there wasn't any selling. This is a positive in our book as it implies some confidence.
Does Chemung Financial Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It appears that Chemung Financial insiders own 21% of the company, worth about US$45m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Chemung Financial Insiders?
The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. Insiders likely see value in Chemung Financial shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Chemung Financial. In terms of investment risks, we've identified 1 warning sign with Chemung Financial and understanding it should be part of your investment process.
But note: Chemung Financial may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.
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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