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Should You Be Worried About Insider Transactions At Boston Properties, Inc. (NYSE:BXP)?

Ray Foley

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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. 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 before you buy or sell Boston Properties, Inc. (NYSE:BXP), you may well want to know whether insiders have been buying or selling.

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, rules govern insider transactions, and certain disclosures are required.

Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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’.

Check out our latest analysis for Boston Properties

Boston Properties Insider Transactions Over The Last Year

Executive Vice President of Boston Region Bryan Koop 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$124 each. That means that an insider was selling shares at slightly below the current price (US$136). While their view may have changed since they sold, this isn’t a particularly bullish sign. We generally consider it a negative if insiders have been selling on market, especially if they did so below the current price. It is worth noting that this sale was 69.8% of Bryan Koop’s holding.

In the last twelve months insiders netted US$1.6m for 12.56k shares sold. In total, Boston Properties insiders sold more than they bought over the last year. The average sell price was around US$126. It’s not particularly great to see insiders were selling shares around current prices. Since insiders sell for many reasons, we wouldn’t put too much weight on it. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

NYSE:BXP Recent Insider Trading, February 25th 2019

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Boston Properties Insiders Are Selling The Stock

The last three months saw significant insider selling at Boston Properties. Specifically, Senior VP Frank Burt ditched US$267k worth of shares in that time, and we didn’t record any purchases whatsoever. Overall this makes us a bit cautious, but it’s not the be all and end all.

Does Boston Properties 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. It appears that Boston Properties insiders own 0.2% of the company, worth about US$36m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Boston Properties Tell Us?

An insider sold stock recently, but they haven’t been buying. And even if we look to the last year, we didn’t see any purchases. But it is good to see that Boston Properties is growing earnings. Insider ownership isn’t particularly high, so this analysis makes us cautious about the company. So we’d only buy after careful consideration. 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: Boston 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.

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 editorial-team@simplywallst.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.