It is not uncommon to see companies perform well in the years after insiders buy shares. 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 STORE Capital Corporation (NYSE:STOR), you may well want to know whether insiders have been buying or selling.
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 equally, we would consider it foolish to ignore insider transactions altogether. 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'.
STORE Capital Insider Transactions Over The Last Year
Independent Director Joseph Donovan made the biggest insider purchase in the last 12 months. That single transaction was for US$89k worth of shares at a price of US$29.53 each. We do like to see buying, but this purchase was made at well below the current price of US$38.58. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
Joseph Donovan purchased 5000 shares over the year. The average price per share was US$32.16. The chart below shows insider transactions (by 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!
STORE Capital is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of STORE Capital
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that STORE Capital insiders own 0.8% of the company, worth about US$75m. 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 Does This Data Suggest About STORE Capital Insiders?
The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. Insiders likely see value in STORE Capital shares, given these transactions (along with notable insider ownership of the company). Of course, the future is what matters most. So if you are interested in STORE Capital, you should check out this free report on analyst forecasts for the company.
Of course STORE Capital 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, but not derivative transactions.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.