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 we’ll take a look at whether insiders have been buying or selling shares in Choice Properties Real Estate Investment Trust (TSE:CHP.UN).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. 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’.
The Last 12 Months Of Insider Transactions At Choice Properties Real Estate Investment Trust
Over the last year, we can see that the biggest insider purchase was by insider Willard Weston for CA$211m worth of shares, at about CA$12.76 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of CA$14.70. Because it occurred at a lower valuation, it doesn’t tell us much about whether insiders might find today’s price attractive.
In the last twelve months insiders purchased 16.67m shares for CA$213m. But they sold 4.47k shares for CA$60k. In the last twelve months there was more buying than selling by Choice Properties Real Estate Investment Trust insiders. 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!
Choice Properties Real Estate Investment Trust is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Choice Properties Real Estate Investment Trust Insiders Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Choice Properties Real Estate Investment Trust. In total, insiders bought CA$476k worth of shares in that time, and we didn’t record any sales whatsoever. This could be interpreted as suggesting a positive outlook.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It appears that Choice Properties Real Estate Investment Trust insiders own 0.2% of the company, worth about CA$20m. 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 Choice Properties Real Estate Investment Trust Insider Transactions Indicate?
It’s certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. Insiders likely see value in Choice Properties Real Estate Investment Trust shares, given these transactions (along with notable insider ownership of the company). So while it’s helpful to know what insiders are doing in terms of buying or selling, it’s also helpful to know the risks that a particular company is facing. Case in point: We’ve spotted 4 warning signs for Choice Properties Real Estate Investment Trust you should be aware of, and 1 of them can’t be ignored.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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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