We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in Innovative Industrial Properties, Inc. (NYSE:IIPR).
What Is Insider Selling?
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.
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. 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.
Innovative Industrial Properties Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the VP, General Counsel & Company Secretary, Brian Wolfe, sold US$283k worth of shares at a price of US$89.01 per share. So what is clear is that an insider saw fit to sell at around the current price of US$77.93. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. In this case, the big sale took place at around the current price, so it’s not too bad (but it’s still not a positive).
Happily, we note that in the last year insiders paid US$69k for 760 shares. On the other hand they divested 5181 shares, for US$464k. All up, insiders sold more shares in Innovative Industrial Properties 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 want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like Innovative Industrial Properties better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders at Innovative Industrial Properties Have Bought Stock Recently
Over the last quarter, Innovative Industrial Properties insiders have spent a meaningful amount on shares. We can see that Executive Chairman Alan Gold paid US$52k for shares in the company. No-one sold. This makes one think the business has some good points.
Insider Ownership of Innovative Industrial Properties
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 4.3% of Innovative Industrial Properties shares, worth about US$40m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Innovative Industrial Properties Insider Transactions Indicate?
It’s certainly positive to see the recent insider purchase. However, the longer term transactions are not so encouraging. We don’t take much heart from transactions by Innovative Industrial Properties insiders over the last year. But they own a reasonable amount of the company, and there was some buying recently. In short they are likely aligned with shareholders. Of course, the future is what matters most. So if you are interested in Innovative Industrial Properties, you should check out this free report on analyst forecasts for the company.
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. We currently account for open market transactions and private dispositions, but not derivative transactions.
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.
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