Extended Stay America, Inc. (NASDAQ:STAY) shareholders (or potential shareholders) will be happy to see that the President, Bruce Haase, recently bought a whopping US$513k worth of stock, at a price of US$10.25. That purchase boosted their holding by 117%, which makes us wonder if the move was inspired by quietly confident deeply-felt optimism.
The Last 12 Months Of Insider Transactions At Extended Stay America
In fact, the recent purchase by Bruce Haase was the biggest purchase of Extended Stay America shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was higher than US$8.20 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
Happily, we note that in the last year insiders paid US$1.2m for 97.20k shares. On the other hand they divested 7500 shares, for US$104k. In total, Extended Stay America insiders bought more than they sold over the last year. They paid about US$12.26 on average. This is nice to see since it implies that insiders might see value around current prices. 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
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. Insiders own 0.9% of Extended Stay America shares, worth about US$13m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Extended Stay America Insider Transactions Indicate?
It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Extended Stay America insiders are well aligned, and that they may think the share price is too low. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example, Extended Stay America has 4 warning signs (and 3 which are concerning) we think you should know about.
Of course Extended Stay America 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 currently account for open market transactions and private dispositions, but not derivative transactions.
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.
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