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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 before you buy or sell Ventas, Inc. (NYSE:VTR), you may well want to know whether insiders have been buying or selling.
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 equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
Ventas Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Executive VP & Chief Investment Officer, John Cobb, for US$725k worth of shares, at about US$72.54 per share. So we know that an insider sold shares at around the present share price of US$60.46. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).
In the last twelve months insiders netted US$1.6m for 24113 shares sold. Ventas insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Ventas better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Ventas Insiders Are Selling The Stock
The last three months saw significant insider selling at Ventas. In total, Executive VP & Chief Investment Officer John Cobb dumped US$725k 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.
Insider Ownership of Ventas
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. Ventas insiders own about US$69m worth of shares. That equates to 0.3% of the company. 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 Do The Ventas Insider Transactions Indicate?
An insider hasn't bought Ventas stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! 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: Ventas 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 email@example.com. 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.