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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 Blackstone Mortgage Trust, Inc. (NYSE:BXMT).
What Is Insider Buying?
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 don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
The Last 12 Months Of Insider Transactions At Blackstone Mortgage Trust
Over the last year, we can see that the biggest insider sale was by Executive VP of Capital Markets Douglas Armer for US$112k worth of shares, at about US$34.87 per share. That means that an insider was selling shares at around the current price of US$33.81. They could have a variety of motivations for selling, but it’s still not particularly encouraging to see. We usually pause to reflect on the potential that a stock has a high valuation, if insiders have been selling at around the current price.
All up, insiders sold more shares in Blackstone Mortgage Trust than they bought, over the last year. The sellers received a price of around US$33.83, on average. It’s not ideal to see that insiders have sold at around the current price. Since insiders sell for many reasons, we wouldn’t put too much weight on it. 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!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Blackstone Mortgage Trust Insiders Are Selling The Stock
The last three months saw significant insider selling at Blackstone Mortgage Trust. In total, insiders sold US$207k worth of shares in that time, and we didn’t record any purchases whatsoever. In light of this it’s hard to argue that all the directors think that the shares are a bargain.
Insider Ownership of Blackstone Mortgage Trust
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Blackstone Mortgage Trust insiders own 1.1% of the company, worth about US$44m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Do The Blackstone Mortgage Trust Insider Transactions Indicate?
Insiders haven’t bought Blackstone Mortgage Trust stock in the last three months, but there was some selling. Despite some insider buying, the longer term picture doesn’t make us feel much more positive. On the plus side, Blackstone Mortgage Trust makes money, and is growing profits. While insiders do own shares, they don’t own a heap, and they have been selling. We’re in no rush to buy! If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 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. Thank you for reading.