We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 we’ll take a look at whether insiders have been buying or selling shares in Hannon Armstrong Sustainable Infrastructure Capital, Inc. (NYSE:HASI).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Hannon Armstrong Sustainable Infrastructure Capital Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when Executive VP & Head of Portfolio Management Group Daniel McMahon sold US$457k worth of shares at a price of US$22.84 per share. That means that even when the share price was below the current price of US$23.97, an insider wanted to cash in some shares. Even though it doesn’t necessarily mean anything, that’s certainly not a positive sign, in our book. We generally consider it a negative if insiders have been selling on market, especially if they did so below the current price. Please note, however, that this single sale was just 8.5% of Daniel McMahon’s stake. Daniel McMahon was the only individual insider to sell shares in the last twelve months.
In the last twelve months insiders purchased 30.31k shares for US$589k. On the other hand they divested 20.00k shares, for US$457k. In the last twelve months there was more buying than selling by Hannon Armstrong Sustainable Infrastructure Capital insiders. The average buy price was around US$19.42. It’s great to see insiders putting their own cash into the company’s stock, albeit at below the recent share price (US$23.97). 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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Does Hannon Armstrong Sustainable Infrastructure Capital Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 4.2% of Hannon Armstrong Sustainable Infrastructure Capital shares, worth about US$63m. 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 Does This Data Suggest About Hannon Armstrong Sustainable Infrastructure Capital Insiders?
The fact that there have been no Hannon Armstrong Sustainable Infrastructure Capital insider transactions recently certainly doesn’t bother us. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Hannon Armstrong Sustainable Infrastructure Capital and we see no evidence to suggest they are worried about the future. Of course, the future is what matters most. So if you are interested in Hannon Armstrong Sustainable Infrastructure Capital, you should check out this free report on analyst forecasts for the company.
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.
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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.