Insider Purchases Worth US$22.3m See Losses As Sunrise Realty Trust Market Value Drops To US$142m

The recent 12% drop in Sunrise Realty Trust, Inc.'s (NASDAQ:SUNS) stock could come as a blow to insiders who purchased US$22.3m worth of stock at an average buy price of US$11.98 over the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth US$18.3m, which is not what they expected.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At Sunrise Realty Trust

In fact, the recent purchase by Founder & Executive Chairman Leonard Tannenbaum was not their only acquisition of Sunrise Realty Trust shares this year. Earlier in the year, they paid US$12.00 per share in a US$12m purchase. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$9.82). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

While Sunrise Realty Trust insiders bought shares during the last year, they didn't sell. You can see a visual depiction of insider transactions (by companies and 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!

View our latest analysis for Sunrise Realty Trust

Sunrise Realty Trust is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Sunrise Realty Trust Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Sunrise Realty Trust. Not only was there no selling that we can see, but they collectively bought US$15m worth of shares. This makes one think the business has some good points.

Insider Ownership Of Sunrise Realty Trust

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 25% of Sunrise Realty Trust shares, worth about US$35m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Sunrise Realty Trust Insider Transactions Indicate?

It is good to see recent purchasing. And the longer term insider transactions also give us confidence. Insiders likely see value in Sunrise Realty Trust shares, given these transactions (along with notable insider ownership of the company). While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Sunrise Realty Trust.

But note: Sunrise Realty 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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.