Securities transactions by corporate insiders of public corporations have received a great deal of attention from regulators, scholars and investors over the years. Assuming that insiders’ purchases and sales are somewhat reflective of the private information they posses, the public disclosures of their trades can serve as very informative signals to the investment community.
Past research shows that insiders’ securities purchases tend to outperform broader market benchmarks, which is the primary reason retail investors, hedge fund vehicles and the media keeps track of insider trading behavior. More importantly, several research papers also conclude that the overall trading behavior of corporate insiders across firms is correlated with aggregate stock returns. This means insider transactions may convey information about macro factors and economic conditions of a country or specific industry. Without further delay, let’s examine a set of insider purchases and sales reported with the U.S. SEC on Friday.
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CEO of Commercial Bank Parke Bank Boosts Ownership Stake
Let’s kick off our discussion with some mild insider buying at Parke Bancorp Inc. (NASDAQ:PKBK), where the company’s most well-informed executive piled up some shares last week. Vito S. Pantilione, who has served as the company’s President and CEO since its founding in 2005, purchased 1,000 shares on Thursday at a price of $19.65 per share. Mr. Pantilione currently owns an aggregate of 155,857 shares.
The shares of the bank holding company for commercial bank Parke Bank have gained 55% in the past year and one would normally anticipate an increase in insider selling rather than buying at the company. The CEO’s small purchase comes several days after Parke Bancorp Inc. (NASDAQ:PKBK) released its financial results for the final quarter of 2016. The bank reported net income of $17.3 million for 2016, up from $9.5 million recorded for the previous year. Another detail worth mentioning is that the bank’s total assets reached $1.0 billion on December 31, an increase of $131.1 million year-over-year. Jim Simons’ Renaissance Technologies LLC owned 17,080 shares of Parke Bancorp Inc. (NASDAQ:PKBK) at the end of the third quarter.
In the next two pages of this insider trading article, we will discuss more insider buying and selling reported on Friday.