We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Macerich Company (NYSE:MAC), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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 equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
The Last 12 Months Of Insider Transactions At Macerich
In the last twelve months, the biggest single sale by an insider was when the insider, Arthur Coppola, sold US$5.3m worth of shares at a price of US$49.79 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$33.23. So it may not tell us anything about how insiders feel about the current share price.
Happily, we note that in the last year insiders paid US$4.6m for 136k shares. On the other hand they divested 125k shares, for US$6.2m. All up, insiders sold more shares in Macerich than they bought, over the last year. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Macerich Insiders Bought Stock Recently
Over the last quarter, Macerich insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought US$2.4m worth of shares. This is a positive in our book as it implies some confidence.
Does Macerich Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 0.5% of Macerich shares, worth about US$28m. 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 Macerich Insiders?
The recent insider purchases are heartening. On the other hand the transaction history, over the last year, isn't so positive. We don't take much heart from transactions by Macerich insiders over the last year. But they own a reasonable amount of the company, and there was some buying recently. So they seem pretty well aligned, overall. Of course, the future is what matters most. So if you are interested in Macerich, you should check out this free report on analyst forecasts for the company.
But note: Macerich 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.
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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.