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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 before you buy or sell Farmland Partners Inc. (NYSE:FPI), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
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, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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 Farmland Partners
Executive Chairman Paul Pittman made the biggest insider purchase in the last 12 months. That single transaction was for US$117k worth of shares at a price of US$6.49 each. That means that an insider was happy to buy shares at above the current price. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. It’s not at all bad to see insiders buy shares at or above current prices.
Over the last year, we can see that insiders have bought 122.53k shares worth US$796k. On the other hand they divested 7.95k shares, for US$65k. In the last twelve months there was more buying than selling by Farmland Partners insiders. They paid about US$6.49 on average. This is nice to see since it implies that insiders might see value around current prices (around US$5.53). The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Farmland Partners Insiders Bought Stock Recently
Over the last quarter, Farmland Partners insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought US$131k worth of shares. That shows some optimism about the company’s future.
Insider Ownership of Farmland Partners
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Farmland Partners insiders own about US$15m worth of shares. That equates to 7.0% of the company. 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 Do The Farmland Partners Insider Transactions Indicate?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss last year, which makes us a little cautious. Given that insiders also own a fair bit of Farmland Partners we think they are probably pretty confident of a bright future. Of course, the future is what matters most. So if you are interested in Farmland Partners, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 firstname.lastname@example.org.