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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Suntec Real Estate Investment Trust (SGX:T82U).
Do Insider Transactions Matter?
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.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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 Suntec Real Estate Investment Trust
Yigang Tang made the biggest insider purchase in the last 12 months. That single transaction was for S$62m worth of shares at a price of S$1.87 each. That implies that an insider found the current price of S$1.89 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for Suntec Real Estate Investment Trust share holders is that an insider was buying at near the current price. The only individual insider to buy over the last year was Yigang Tang.
Yigang Tang bought a total of 34.4m shares over the year at an average price of S$1.87. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Suntec Real Estate Investment Trust is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Suntec Real Estate Investment 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. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Suntec Real Estate Investment Trust insiders own 25% of the company, worth about S$1.3b. 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 Do The Suntec Real Estate Investment Trust Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Suntec Real Estate Investment Trust shares in the last quarter. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like Suntec Real Estate Investment Trust insiders think the business has merit. Of course, the future is what matters most. So if you are interested in Suntec Real Estate Investment Trust, you should check out this free report on analyst forecasts for the company.
Of course Suntec Real Estate Investment Trust may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.
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 email@example.com. 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.