We often see insiders buying up shares in companies that perform well over the long term. 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 Urban Logistics REIT plc (LON:SHED).
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 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’.
The Last 12 Months Of Insider Transactions At Urban Logistics REIT
The Independent Non-Executive Chairman Nigel Sutherland Rich made the biggest insider purchase in the last 12 months. That single transaction was for UK£151k worth of shares at a price of UK£1.38 each. So it’s clear an insider wanted to buy, at around the current price, which is UK£1.45. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it’s a good sign on balance, but keep in mind they may no longer see value. In this case we’re pleased to report that the insider purchases were made at close to current prices.
Urban Logistics REIT insiders may have bought shares in the last year, but they didn’t sell any. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
Urban Logistics REIT is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. From looking at our data, insiders own UK£2.4m worth of Urban Logistics REIT stock, about 0.9% of the company. I generally like to see higher levels of ownership.
So What Does This Data Suggest About Urban Logistics REIT Insiders?
The fact that there have been no Urban Logistics REIT insider transactions recently certainly doesn’t bother us. On a brighter note, the transactions over the last year are encouraging. While we have no worries about the insider transactions, we’d be more comfortable if they owned more Urban Logistics REIT stock. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. Our analysis shows 4 warning signs for Urban Logistics REIT (1 is a bit concerning!) and we strongly recommend you look at them before investing.
Of course Urban Logistics REIT may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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