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 SL Green Realty Corp. (NYSE:SLG).
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. 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 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.'
SL Green Realty Insider Transactions Over The Last Year
The Chief Legal Officer, Andrew Levine, made the biggest insider sale in the last 12 months. That single transaction was for US$1.5m worth of shares at a price of US$100 each. So we know that an insider sold shares at around the present share price of US$90.49. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.
In the last twelve months insiders netted US$1.8m for 18500 shares sold. SL Green Realty insiders didn't buy any shares over the last year. 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.
Insiders at SL Green Realty Have Sold Stock Recently
The last quarter saw substantial insider selling of SL Green Realty shares. In total, Director Craig Hatkoff sold US$231k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
Insider Ownership of SL Green Realty
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. 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 appears that SL Green Realty insiders own 0.3% of the company, worth about US$25m. 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 SL Green Realty Insiders?
An insider hasn't bought SL Green Realty stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. But since SL Green Realty is profitable and growing, we're not too worried by this. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for SL Green Realty.
Of course SL Green Realty may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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