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Northrim BanCorp, Inc. (NASDAQ:NRIM) Insiders Increased Their Holdings

We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Northrim BanCorp, Inc. (NASDAQ:NRIM), you may well want to know whether insiders have been buying or selling.

What Is Insider Buying?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.

Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

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View our latest analysis for Northrim BanCorp

The Last 12 Months Of Insider Transactions At Northrim BanCorp

The Independent Director, David Wight, made the biggest insider sale in the last 12 months. That single transaction was for US$65k worth of shares at a price of US$32.68 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$40.40. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 13% of David Wight's holding. David Wight was the only individual insider to sell over the last year.

Happily, we note that in the last year insiders paid US$143k for 3.80k shares. On the other hand they divested 2.00k shares, for US$65k. In the last twelve months there was more buying than selling by Northrim BanCorp insiders. They paid about US$37.71 on average. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price. 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!

insider-trading-volume
insider-trading-volume

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).

Northrim BanCorp Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Northrim BanCorp. Overall, three insiders shelled out US$74k for shares in the company -- and none sold. That shows some optimism about the company's future.

Does Northrim BanCorp Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 2.3% of Northrim BanCorp shares, worth about US$5.7m, according to our data. We do generally prefer see higher levels of insider ownership.

What Might The Insider Transactions At Northrim BanCorp Tell Us?

It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Northrim BanCorp insiders are expecting a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Northrim BanCorp. In terms of investment risks, we've identified 1 warning sign with Northrim BanCorp and understanding it should be part of your investment process.

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. 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.