It is not uncommon to see companies perform well in the years after insiders buy shares. 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 shareholders might well want to know whether insiders have been buying or selling shares in Choice Properties Real Estate Investment Trust (TSE:CHP.UN).
What Is Insider Selling?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
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.’
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Choice Properties Real Estate Investment Trust Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by President Stephen Johnson for CA$5.7m worth of shares, at about CA$12.99 per share. That means that an insider was happy to buy shares at above the current price. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. It’s not at all bad to see insiders buy shares at or above current prices.
Happily, we note that in the last year insiders paid CA$11m for 901.52k shares. On the other hand they divested 43.48k shares, for CA$537k. In total, Choice Properties Real Estate Investment Trust insiders bought more than they sold over the last year. They paid about CA$12.19 on average. It’s great to see insiders putting their own cash into the company’s stock, albeit at below the recent share price (CA$12.72). The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Choice Properties Real Estate Investment Trust is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Choice Properties Real Estate Investment Trust Insiders Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Choice Properties Real Estate Investment Trust. In total, insiders bought CA$5.8m worth of shares in that time, and we didn’t record any sales whatsoever. This is a positive in our book as it implies some confidence.
Does Choice Properties Real Estate Investment Trust Boast High Insider Ownership?
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 Choice Properties Real Estate Investment Trust insiders own 0.7% of the company, worth about CA$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 Choice Properties Real Estate Investment Trust Insiders?
The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. Given that insiders also own a fair bit of Choice Properties Real Estate Investment Trust we think they are probably pretty confident of a bright future. Of course, the future is what matters most. So if you are interested in Choice Properties Real Estate Investment Trust, 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.