We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Camden Property Trust (NYSE:CPT).
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, 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. 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.’
Camden Property Trust Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by Chairman & CEO Richard Campo for US$7.6m worth of shares, at about US$93.82 per share. That means that an insider was selling shares at slightly below the current price (US$100). 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. We note that the biggest single sale was only 24.5% of Richard Campo’s holding.
Over the last year, we note insiders sold 473.75k shares worth US$45m. All up, insiders sold more shares in Camden Property Trust than they bought, over the last year. The average sell price was around US$94.00. It’s not particularly great to see insiders were selling shares around current prices. But we don’t put too much weight on the insider selling, since sellers could have personal reasons. 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 like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at Camden Property Trust Have Sold Stock Recently
The last three months saw significant insider selling at Camden Property Trust. In total, Trust Manager William Paulsen sold US$1.3m 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 Camden Property Trust
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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. It’s great to see that Camden Property Trust insiders own 1.2% of the company, worth about US$113m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About Camden Property Trust Insiders?
An insider hasn’t bought Camden Property Trust stock in the last three months, but there was some selling. And even if we look to the last year, we didn’t see any purchases. It is good to see high insider ownership, but the insider selling leaves us cautious. 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.
But note: Camden Property Trust may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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