It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Equity LifeStyle Properties, Inc. (NYSE:ELS), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
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 equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.
The Last 12 Months Of Insider Transactions At Equity LifeStyle Properties
The Executive Vice President of Investments, Roger Maynard, made the biggest insider sale in the last 12 months. That single transaction was for US$1.3m worth of shares at a price of US$62.59 each. That means that an insider was selling shares at slightly below the current price (US$68.13). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 7.1% of Roger Maynard's holding.
In the last twelve months insiders netted US$3.8m for 67162 shares sold. Insiders in Equity LifeStyle Properties didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insiders at Equity LifeStyle Properties Have Sold Stock Recently
Over the last three months, we've seen significant insider selling at Equity LifeStyle Properties. In total, insiders sold US$2.1m 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 Equity LifeStyle Properties Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Equity LifeStyle Properties insiders own 2.2% of the company, worth about US$289m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At Equity LifeStyle Properties Tell Us?
Insiders haven't bought Equity LifeStyle Properties 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 it is good to see that Equity LifeStyle Properties is growing earnings. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. Of course, the future is what matters most. So if you are interested in Equity LifeStyle Properties, you should check out this free report on analyst forecasts for the company.
But note: Equity LifeStyle Properties 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.
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.
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.