Should You Take Comfort From Insider Transactions At Apple Hospitality REIT, Inc. (NYSE:APLE)?
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We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Apple Hospitality REIT, Inc. (NYSE:APLE), you may well want to know whether insiders have been buying or selling.
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 on the market. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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 Apple Hospitality REIT
The Last 12 Months Of Insider Transactions At Apple Hospitality REIT
Executive Chairman Glade Knight made the biggest insider purchase in the last 12 months. That single transaction was for US$450k worth of shares at a price of US$17.10 each. That means that an insider was happy to buy shares at above the current price. Their view may have changed since then, but at least it shows they felt optimistic at the time. That purchase may suggest an expectation of positive returns over the long term.
Happily, we note that in the last year insiders bought 124.12k shares for a total of US$2.1m. Overall, Apple Hospitality REIT insiders were net buyers last year. The average buy price was around US$16.97. This is nice to see since it implies that insiders might see value around current prices (around US$16.21). You can see the insider transactions (by 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!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Apple Hospitality REIT Insiders Bought Stock Recently
It’s good to see that Apple Hospitality REIT insiders have made notable investments in the company’s shares. Not only was there no selling that we can see, but they collectively bought US$475k worth of shares. This makes one think the business has some good points.
Insider Ownership of Apple Hospitality REIT
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Apple Hospitality REIT insiders own 6.2% of the company, currently worth about US$229m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At Apple Hospitality REIT Tell Us?
It’s certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Apple Hospitality REIT. Looks promising! Of course, the future is what matters most. So if you are interested in Apple Hospitality REIT, you should check out this free report on analyst forecasts for the company.
Of course Apple Hospitality REIT may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
