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 Four Corners Property Trust, Inc. (NYSE:FCPT).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. 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.’
Four Corners Property Trust Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the General Counsel & Secretary, James Brat, for US$164k worth of shares, at about US$27.41 per share. So it’s clear an insider wanted to take some cash off the table, even below the current price of US$28.07. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don’t know for sure what they think of the stock price. This single sale was just 15.1% of James Brat’s stake.
In the last twelve months insiders netted US$374k for 13718 shares sold. In the last year Four Corners Property Trust insiders didn’t buy any company stock. 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!
Insiders at Four Corners Property Trust Have Sold Stock Recently
The last three months saw some Four Corners Property Trust insider selling. Chief Accounting Officer Niccole Stewart divested only US$22k worth of shares in that time. It’s not great to see insider selling, nor the lack of recent buyers. But the amount sold isn’t enough for us to put any weight on it.
Insider Ownership of Four Corners Property Trust
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Four Corners Property Trust insiders own 0.8% of the company, worth about US$14m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Four Corners Property Trust Insiders?
While there has not been any insider buying in the last three months, there has been selling. However, the sales are not big enough to concern us at all. Recent sales exacerbate our caution arising from analysis of Four Corners Property Trust insider transactions. The modest level of insider ownership is, at least, some comfort. Of course, the future is what matters most. So if you are interested in Four Corners Property Trust, you should check out this free report on analyst forecasts for the company.
But note: Four Corners Property Trust 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.
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 firstname.lastname@example.org. 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.