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 shareholders might well want to know whether insiders have been buying or selling shares in Tanger Factory Outlet Centers, Inc. (NYSE:SKT).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
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'.
The Last 12 Months Of Insider Transactions At Tanger Factory Outlet Centers
Over the last year, we can see that the biggest insider sale was by the insider, Virginia Summerell, for US$230k worth of shares, at about US$18.25 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of US$14.55. So it may not tell us anything about how insiders feel about the current share price.
Happily, we note that in the last year insiders paid US$391k for 27000 shares. On the other hand they divested 47628 shares, for US$956k. All up, insiders sold more shares in Tanger Factory Outlet Centers than they bought, over the last year. 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 that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at Tanger Factory Outlet Centers Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Tanger Factory Outlet Centers. Not only was there no selling that we can see, but they collectively bought US$391k worth of shares. That shows some optimism about the company's future.
Insider Ownership of Tanger Factory Outlet Centers
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. Insiders own 2.2% of Tanger Factory Outlet Centers shares, worth about US$31m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About Tanger Factory Outlet Centers Insiders?
It's certainly positive to see the recent insider purchases. However, the longer term transactions are not so encouraging. While recent transactions indicate confidence in Tanger Factory Outlet Centers, insiders don't own enough of the company to overcome our cautiousness about the longer term transactions. Overall they seem reasonably aligned. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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.
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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.