We often see insiders buying up shares in companies that perform well over the long term. 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 Equity LifeStyle Properties, Inc. (NYSE:ELS), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. 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 Equity LifeStyle Properties
In the last twelve months, the biggest single purchase by an insider was when Chairman of the Board Samuel Zell bought US$1.8m worth of shares at a price of US$89.56 per share. Even though the purchase was made at a significantly lower price than the recent price (US$112), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
Over the last year we saw more insider selling of Equity LifeStyle Properties shares, than buying. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like Equity LifeStyle Properties better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Equity LifeStyle Properties Insiders Are Selling The Stock
The last three months saw significant insider selling at Equity LifeStyle Properties. In total, Director David Contis sold US$695k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Does Equity LifeStyle Properties Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It's great to see that Equity LifeStyle Properties insiders own 2.2% of the company, worth about US$248m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About Equity LifeStyle Properties Insiders?
An insider sold stock recently, but they haven't been buying. Despite some insider buying, the longer term picture doesn't make us feel much more positive. On the plus side, Equity LifeStyle Properties makes money, and is growing profits. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. Of course, the future is what matters most. So if you are interested in Equity LifeStyle Properties, 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.
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