It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Automotive Properties Real Estate Investment Trust (TSE:APR.UN).
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, 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 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'.
Automotive Properties Real Estate Investment Trust Insider Transactions Over The Last Year
The Chairman of the Board Kapil Dilawri made the biggest insider purchase in the last 12 months. That single transaction was for CA$500k worth of shares at a price of CA$7.30 each. Even though the purchase was made at a significantly lower price than the recent price (CA$9.93), 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.
Automotive Properties Real Estate Investment Trust insiders may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by companies and 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!
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.
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. Our data suggests Automotive Properties Real Estate Investment Trust insiders own 0.8% of the company, worth about CA$3.6m. However, it's possible that insiders might have an indirect interest through a more complex structure. I generally like to see higher levels of ownership.
So What Do The Automotive Properties Real Estate Investment Trust Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Automotive Properties Real Estate Investment Trust shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. We'd like to see bigger individual holdings. However, we don't see anything to make us think Automotive Properties Real Estate Investment Trust insiders are doubting the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Automotive Properties Real Estate Investment Trust. Be aware that Automotive Properties Real Estate Investment Trust is showing 4 warning signs in our investment analysis, and 2 of those are a bit unpleasant...
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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