Did Firm Capital Apartment Real Estate Investment Trust (CVE:FCA.U) Insiders Buy Up More Shares?

By
Simply Wall St
Published
June 04, 2021
TSXV:FCA.UN
Source: Shutterstock

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 we'll take a look at whether insiders have been buying or selling shares in Firm Capital Apartment Real Estate Investment Trust (CVE:FCA.U).

Do Insider Transactions Matter?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, such insiders must disclose their trading activities, and not trade on inside information.

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'.

See our latest analysis for Firm Capital Apartment Real Estate Investment Trust

Firm Capital Apartment Real Estate Investment Trust Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Independent Trustee Pasquale DiCapo for CA$227k worth of shares, at about CA$7.57 per share. That means that an insider was happy to buy shares at around the current price of CA$8.00. Of course they may have changed their mind. But this suggests they are optimistic. 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. In this case we're pleased to report that the insider purchases were made at close to current prices.

While Firm Capital Apartment Real Estate Investment Trust insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
TSXV:FCA.U Insider Trading Volume June 5th 2021

Firm Capital Apartment Real Estate Investment Trust is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Have Firm Capital Apartment Real Estate Investment Trust Insiders Traded Recently?

CFO & Director Sandy Poklar bought just CA$2.7k worth of shares in that time. That's not much at all. Looking at the net result, we don't think these recent trades shed much light on how insiders, as a group, are feeling about the company's prospects.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. From our data, it seems that Firm Capital Apartment Real Estate Investment Trust insiders own 12% of the company, worth about CA$7.7m. We do generally prefer see higher levels of insider ownership.

So What Does This Data Suggest About Firm Capital Apartment Real Estate Investment Trust Insiders?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. Overall the buying isn't worth writing home about. But insiders have shown more of an appetite for the stock, over the last year. The transactions are fine but it'd be more encouraging if Firm Capital Apartment Real Estate Investment Trust insiders bought more shares in the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we've found that Firm Capital Apartment Real Estate Investment Trust has 6 warning signs (1 is potentially serious!) that deserve your attention before going any further with your analysis.

But note: Firm Capital Apartment Real Estate Investment 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.

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