It is not uncommon to see companies perform well in the years after insiders buy shares. 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 we’ll take a look at whether insiders have been buying or selling shares in Blackstone Mortgage Trust, Inc. (NYSE:BXMT).
Do Insider Transactions Matter?
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.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. 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.’
The Last 12 Months Of Insider Transactions At Blackstone Mortgage Trust
Over the last year, we can see that the biggest insider sale was by the Executive VP of Capital Markets, Douglas Armer, for US$112k worth of shares, at about US$34.87 per share. So we know that an insider sold shares at around the present share price of US$34.75. While we don’t usually like to see insider selling, it’s more concerning if the sales take price at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.
In total, Blackstone Mortgage Trust insiders sold more than they bought over the last year. The chart below shows insider transactions (by 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!
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Insiders at Blackstone Mortgage Trust Have Sold Stock Recently
Over the last three months, we’ve seen significant insider selling at Blackstone Mortgage Trust. Specifically, insiders ditched US$57k worth of shares in that time, and we didn’t record any purchases whatsoever. In light of this it’s hard to argue that all the directors think that the shares are a bargain.
Insider Ownership of Blackstone Mortgage Trust
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 1.1% of Blackstone Mortgage Trust shares, worth about US$46m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Do The Blackstone Mortgage Trust Insider Transactions Indicate?
Insiders sold Blackstone Mortgage Trust shares recently, but they didn’t buy any. Despite some insider buying, the longer term picture doesn’t make us feel much more positive. But it is good to see that Blackstone Mortgage Trust is growing earnings. Insider ownership isn’t particularly high, so this analysis makes us cautious about the company. We’d think twice before buying! 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.
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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. Thank you for reading.