It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell One Liberty Properties, Inc. (NYSE:OLP), 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 would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
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One Liberty Properties Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by Executive VP & COO Lawrence Ricketts for US$119k worth of shares, at about US$23.83 per share. So it’s clear an insider wanted to take some cash off the table, even below the current price of US$27.06. Even though it doesn’t necessarily mean anything, that’s certainly not a positive sign, in our book. When an insider sells below the current price, it does tend to make us wonder about the current valuation. It is worth noting that this sale was only 4.8% of Lawrence Ricketts’s holding.
We note that in the last year insiders divested 20.08k shares for a total of US$510k. Over the last year we saw more insider selling of One Liberty Properties shares, than buying. The sellers received a price of around US$25.40, on average. It’s not ideal to see that insiders have sold at around the current price. But we don’t put too much weight on the insider selling, since sellers could have personal reasons. 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!
I will like One Liberty Properties better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insider Ownership of One Liberty Properties
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It appears that One Liberty Properties insiders own 16% of the company, worth about US$83m. 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 Does This Data Suggest About One Liberty Properties Insiders?
It doesn’t really mean much that no insider has traded One Liberty Properties shares in the last quarter. We don’t take much encouragement from the transactions by One Liberty Properties insiders. But we do like the fact that insiders own a fair chunk of the company. Of course, the future is what matters most. So if you are interested in One Liberty Properties, you should check out this free report on analyst forecasts for the company.
But note: One Liberty Properties may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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 email@example.com.