We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in W. P. Carey Inc. (NYSE:WPC).
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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.’
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The Last 12 Months Of Insider Transactions At W. P. Carey
Non-Executive Vice-Chairman of the Board Christopher Niehaus made the biggest insider purchase in the last 12 months. That single transaction was for US$254k worth of shares at a price of US$66.08 each. That means that an insider was happy to buy shares at around the current price. Of course they may have changed their mind. But this suggests they are optimistic. We generally consider it a positive if insiders have been buying on market, even if the share price has increased a bit since then.
Over the last year, we can see that insiders have bought 6.15k shares worth US$403k. But insiders sold 614.00 shares worth US$41k. In total, W. P. Carey insiders bought more than they sold over the last year. The average buy price was around US$65.58. It’s great to see insiders putting their own cash into the company’s stock, albeit at below the recent share price (US$77.77). The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like W. P. Carey better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insider Ownership of W. P. Carey
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. It’s great to see that W. P. Carey insiders own 1.2% of the company, worth about US$156m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About W. P. Carey Insiders?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. However, our analysis of transactions over the last year is heartening. Judging from their transactions, and high insider ownership, W. P. Carey insiders feel good about the company’s future. 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.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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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.