We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 before you buy or sell RioCan Real Estate Investment Trust (TSE:REI.UN), you may well want to know whether insiders have been buying or selling.
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.
Insider transactions are not the most important thing when it comes to long-term investing. 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 RioCan Real Estate Investment Trust
The insider, John Ballantyne, made the biggest insider sale in the last 12 months. That single transaction was for CA$1.1m worth of shares at a price of CA$26.90 each. So it’s clear an insider wanted to take some cash off the table, even slightly below the current price of CA$27.34. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it’s only a weak signal. This single sale was just 49% of John Ballantyne’s stake.
Over the last year, we can see that insiders have bought 15.35k shares worth CA$402k. On the other hand they divested 42620 shares, for CA$1.1m. All up, insiders sold more shares in RioCan Real Estate Investment Trust than they bought, over the last year. 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!
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Does RioCan Real Estate Investment Trust Boast High Insider Ownership?
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. It appears that RioCan Real Estate Investment Trust insiders own 0.3% of the company, worth about CA$26m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At RioCan Real Estate Investment Trust Tell Us?
It doesn’t really mean much that no insider has traded RioCan Real Estate Investment Trust shares in the last quarter. Still, the insider transactions at RioCan Real Estate Investment Trust in the last 12 months are not very heartening. But we do like the fact that insiders own a fair chunk of the company. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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 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.
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