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 we'll take a look at whether insiders have been buying or selling shares in Hersha Hospitality Trust (NYSE:HT).
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 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 Hersha Hospitality Trust
The Independent Trustee, Thomas Hutchison, made the biggest insider sale in the last 12 months. That single transaction was for US$145k worth of shares at a price of US$14.45 each. So we know that an insider sold shares at around the present share price of US$14.04. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern. Thomas Hutchison was the only individual insider to sell over the last year.
Happily, we note that in the last year insiders paid US$652k for 45.34k shares. But they sold 15000 for US$217k. Overall, Hersha Hospitality Trust insiders were net buyers last year. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Hersha Hospitality Trust is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Hersha Hospitality Trust Insiders Are Selling The Stock
We've seen more insider selling than insider buying at Hersha Hospitality Trust recently. In total, Independent Trustee Thomas Hutchison sold US$217k worth of shares in that time. Meanwhile insiders bought US$114k worth. Because the selling vastly outweighs the buying, we'd say this is a somewhat bearish sign.
Does Hersha Hospitality Trust Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Hersha Hospitality Trust insiders own 4.7% of the company, worth about US$28m. 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 Hersha Hospitality Trust Insiders?
The stark truth for Hersha Hospitality Trust is that there has been more insider selling than insider buying in the last three months. In contrast, they appear keener if you look at the last twelve months. It's good to see insiders are shareholders. So we're not overly bothered by recent selling. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Hersha Hospitality Trust.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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