It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Vector Group Ltd. (NYSE:VGR).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. 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.’
Vector Group Insider Transactions Over The Last Year
President Howard Lorber made the biggest insider sale in the last 12 months. That single transaction was for US$9.9m worth of shares at a price of US$14.18 each. Although we don’t gain confidence from insider selling, we note that this large sale was at well above current price of US$10.69. So it may not tell us anything about how insiders feel about the current share price.
We note that in the last year insiders divested 1.60m shares for a total of US$21m. Over the last year we saw more insider selling of Vector Group shares, than buying. The sellers received a price of around US$13.39, on average. We are not joyful about insider selling. But we note that the selling, on average, was at well above the recently traded price of US$10.69. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Does Vector Group 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. We usually like to see fairly high levels of insider ownership. Vector Group insiders own about US$134m worth of shares (which is 8.9% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Vector Group Tell Us?
It doesn’t really mean much that no insider has traded Vector Group shares in the last quarter. It’s great to see high levels of insider ownership, but looking back at the last year, we don’t gain confidence from the Vector Group insiders selling. Of course, the future is what matters most. So if you are interested in Vector Group, you should check out this free report on analyst forecasts for the company.
But note: Vector Group 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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.