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It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Sun Communities, Inc. (NYSE:SUI).
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, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. 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.’
Sun Communities Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Director Arthur Weiss bought US$30m worth of shares at a price of US$118 per share. So it’s clear an insider wanted to buy, at around the current price, which is US$130. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. While we always like to see insider buying, it’s less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. Happily, the Sun Communities insider decided to buy shares at close to current prices. The only individual insider to buy over the last year was Arthur Weiss.
The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Sun Communities Insiders Are Selling The Stock
The last quarter saw substantial insider selling of Sun Communities shares. In total, Lead Independent Director Clunet Lewis dumped US$282k worth of shares in that time, and we didn’t record any purchases whatsoever. In light of this it’s hard to argue that all the insiders think that the shares are a bargain.
Insider Ownership of Sun Communities
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. Sun Communities insiders own 2.6% of the company, currently worth about US$315m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Sun Communities Tell Us?
An insider hasn’t bought Sun Communities stock in the last three months, but there was some selling. On the other hand, the insider transactions over the last year are encouraging. On top of that, insiders own a significant portion of the company. So we’re not too bothered by recent selling. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Sun Communities.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.
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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.