We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in Exantas Capital Corp. (NYSE:XAN).
Do Insider Transactions Matter?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
The Last 12 Months Of Insider Transactions At Exantas Capital
In the last twelve months, the biggest single purchase by an insider was when Director Jeffrey Cohen bought US$93k worth of shares at a price of US$9.30 per share. That means that an insider was happy to buy shares at around the current price. That means they have been optimistic about the company in the past, though they may have changed their mind. In any event it’s generally a positive if insiders are buying shares at around the current price.
Happily, we note that in the last year insiders paid US$237k for 25.78k shares. But insiders sold 3.00k shares worth US$30k. In total, Exantas Capital insiders bought more than they sold over the last year. The average buy price was around US$9.18. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price of US$10.80. 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!
I will like Exantas Capital better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Exantas Capital insiders own about US$11m worth of shares. That equates to 3.1% of the company. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Exantas Capital Tell Us?
It doesn’t really mean much that no insider has traded Exantas Capital shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders own shares in Exantas Capital and we see no evidence to suggest they are worried about the future. Of course, the future is what matters most. So if you are interested in Exantas Capital, you should check out this free report on analyst forecasts for the company.
Of course Exantas Capital may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.