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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. 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 Mid-America Apartment Communities, Inc. (NYSE:MAA).
What Is Insider Selling?
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, 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.’
Mid-America Apartment Communities Insider Transactions Over The Last Year
Russell French made the biggest insider sale in the last 12 months. That single transaction was for US$503k worth of shares at a price of US$101 each. So it’s clear an insider wanted to take some cash off the table, even below the current price of US$105. While their view may have changed since they sold, this isn’t a particularly bullish sign. As a general rule we consider it to be discouraging when insiders are selling below the current price. We note that the biggest single sale was only 21.9% of Russell French’s holding.
In the last twelve months insiders purchased 3.93k shares for US$346k. But insiders sold 8.39k shares worth US$851k. In total, Mid-America Apartment Communities insiders sold more than they bought over the last year. The sellers received a price of around US$101, on average. We don’t gain confidence from insider selling below the recent share price. But we wouldn’t put too much weight on the insider selling. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. 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).
Insiders at Mid-America Apartment Communities Have Sold Stock Recently
The last quarter saw substantial insider selling of Mid-America Apartment Communities shares. Specifically, Director David Stockert ditched US$184k 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 Mid-America Apartment Communities 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. I reckon it’s a good sign if insiders own a significant number of shares in the company. Mid-America Apartment Communities insiders own about US$69m worth of shares. That equates to 0.6% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Mid-America Apartment Communities Insiders?
An insider sold Mid-America Apartment Communities shares recently, but they didn’t buy any. And our longer term analysis of insider transactions didn’t bring confidence, either. Insiders own shares, but we’re still pretty cautious, given the history of sales. We’d think twice before buying! Of course, the future is what matters most. So if you are interested in Mid-America Apartment Communities, 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.
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.