We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Fifth Third Bancorp (NASDAQ:FITB).
Do Insider Transactions Matter?
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’.
Check out our latest analysis for Fifth Third Bancorp
The Last 12 Months Of Insider Transactions At Fifth Third Bancorp
The Independent Director Katherine Blackburn made the biggest insider purchase in the last 12 months. That single transaction was for US$994k worth of shares at a price of US$16.90 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$26.56. 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.
Happily, we note that in the last year insiders paid US$1.1m for 65.10k shares. But insiders sold 17.54k shares worth US$434k. Overall, Fifth Third Bancorp insiders were net buyers during the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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).
Insider Ownership
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Fifth Third Bancorp insiders own 0.4% of the company, worth about US$76m. 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 Do The Fifth Third Bancorp Insider Transactions Indicate?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Fifth Third Bancorp 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 Fifth Third Bancorp. In terms of investment risks, we’ve identified 1 warning sign with Fifth Third Bancorp and understanding this should be part of your investment process.
Of course Fifth Third Bancorp may not be the best stock to buy. So you may wish to see this free collection of high quality 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.
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