One Starwood Property Trust Insider Has Reduced Their Stake

Looking at Starwood Property Trust, Inc.'s (NYSE:STWD ) insider transactions over the last year, we can see that insiders were net sellers. That is, there were more number of shares sold by insiders than there were purchased.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Starwood Property Trust

The Last 12 Months Of Insider Transactions At Starwood Property Trust

The President & MD, Jeffrey DiModica, made the biggest insider sale in the last 12 months. That single transaction was for US$2.0m worth of shares at a price of US$20.28 each. So we know that an insider sold shares at around the present share price of US$20.20. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign. Jeffrey DiModica was the only individual insider to sell over the last year.

Jeffrey DiModica ditched 130.11k shares over the year. The average price per share was US$20.30. 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Starwood Property Trust insiders own 5.0% of the company, worth about US$337m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Starwood Property Trust Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Starwood Property Trust shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Starwood Property Trust insiders selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Starwood Property Trust. Our analysis shows 5 warning signs for Starwood Property Trust (2 make us uncomfortable!) and we strongly recommend you look at them before investing.

But note: Starwood Property 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.