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 United Security Bancshares (NASDAQ:UBFO), that sends out a positive message to the company's shareholders.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At United Security Bancshares
Over the last year, we can see that the biggest insider purchase was by Independent Director Kenneth Newby for US$98k worth of shares, at about US$8.15 per share. That means that an insider was happy to buy shares at above the current price of US$7.02. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Over the last year, we can see that insiders have bought 25.97k shares worth US$209k. But they sold 2.32k shares for US$16k. Overall, United Security Bancshares insiders were net buyers during the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
United Security Bancshares is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Are United Security Bancshares Insiders Buying Or Selling?
We saw some United Security Bancshares insider buying shares in the last three months. Chairman Dennis Woods bought US$21k worth in that time. On the other hand, Senior VP & Chief Risk Officer Robert Oberg sold US$16k worth of shares. It is nice to see that insiders have bought, but the quantum isn't large enough to get us excited.
Does United Security Bancshares Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Insiders own 15% of United Security Bancshares shares, worth about US$18m. 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 United Security Bancshares Insider Transactions Indicate?
Insider purchases may have been minimal, in the last three months, but there was no selling at all. Overall the buying isn't worth writing home about. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in United Security Bancshares and their transactions don't cause us concern. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example, United Security Bancshares has 2 warning signs (and 1 which is significant) we think you should know about.
Of course United Security Bancshares 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.
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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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