We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Hotel Property Investments (ASX:HPI).
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, including certain disclosures.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Hotel Property Investments Insider Transactions Over The Last Year
There wasn’t any very large single transaction over the last year, but we can still observe some trading.
In the last twelve months insiders paid AU$91k for 30.00k shares purchased. In the last twelve months there was more buying than selling by Hotel Property Investments insiders. The average buy price was around AU$3.05. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price of AU$3.20. You can see a visual depiction of insider transactions over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insiders at Hotel Property Investments Have Bought Stock Recently
Over the last three months, we’ve seen a bit of insider buying at Hotel Property Investments. CEO, MD & Director Donald Smith shelled out AU$31k for shares in that time. It’s great to see that insiders are only buying, not selling. But the amount invested in the last three months isn’t enough for us too put much weight on it, as a single factor.
Insider Ownership of Hotel Property Investments
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Hotel Property Investments insiders own about AU$7.0m worth of shares (which is 2.1% of the company). We do generally prefer see higher levels of insider ownership.
So What Do The Hotel Property Investments Insider Transactions Indicate?
Our data shows a little more insider buying than selling in the last three months. But overall the difference isn’t worth writing home about. However, our analysis of transactions over the last year is heartening. While we have no worries about the insider transactions, we’d be more comfortable if they owned more Hotel Property Investments stock. Of course, the future is what matters most. So if you are interested in Hotel Property Investments, you should check out this free report on analyst forecasts for the company.
Of course Hotel Property Investments may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.