Selling US$2.7m Of Bankwell Financial Group Stock Rewarded Insiders
While it’s been a great week for Bankwell Financial Group, Inc. (NASDAQ:BWFG) shareholders after stock gained 11%, they should consider it with a grain of salt. In spite of the relatively cheap prices, insiders made the decision to sell US$2.7m worth of stock in the last 12 months. This could be a warning indicator of vulnerabilities in the future.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Bankwell Financial Group
Over the last year, we can see that the biggest insider sale was by the insider, George Bauer, for US$1.1m worth of shares, at about US$48.10 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$66.86. 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. This single sale was just 8.5% of George Bauer's stake.
Happily, we note that in the last year insiders paid US$389k for 8.29k shares. On the other hand they divested 55.99k shares, for US$2.7m. All up, insiders sold more shares in Bankwell Financial Group than they bought, over the last year. 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!
Check out our latest analysis for Bankwell Financial Group
I will like Bankwell Financial Group better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
Insiders At Bankwell Financial Group Have Sold Stock Recently
Over the last three months, we've seen notably more insider selling, than insider buying, at Bankwell Financial Group. In that time, insiders dumped US$477k worth of shares. Meanwhile insiders bought US$94k worth. Because the selling vastly outweighs the buying, we'd say this is a somewhat bearish sign.
Insider Ownership Of Bankwell Financial Group
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. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Bankwell Financial Group insiders own 12% of the company, worth about US$62m. 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 Do The Bankwell Financial Group Insider Transactions Indicate?
Unfortunately, there has been more insider selling of Bankwell Financial Group stock, than buying, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. On the plus side, Bankwell Financial Group makes money, and is growing profits. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 1 warning sign for Bankwell Financial Group that deserve your attention before buying any shares.
Of course Bankwell Financial Group 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 of direct interests only, but not derivative transactions or indirect interests.
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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.