Need To Know: Gaming and Leisure Properties, Inc. (NASDAQ:GLPI) Insiders Have Been Selling Shares

By
Simply Wall St
Published
June 29, 2021
NasdaqGS:GLPI
Source: Shutterstock

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 Gaming and Leisure Properties, Inc. (NASDAQ:GLPI).

What Is Insider Selling?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. 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 it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

See our latest analysis for Gaming and Leisure Properties

The Last 12 Months Of Insider Transactions At Gaming and Leisure Properties

Over the last year, we can see that the biggest insider sale was by the Senior VP & Chief Investment Officer, Matthew Demchyk, for US$899k worth of shares, at about US$44.57 per share. That means that even when the share price was below the current price of US$46.08, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 37% of Matthew Demchyk's stake. Matthew Demchyk was the only individual insider to sell over the last year.

Matthew Demchyk ditched 33.74k shares over the year. The average price per share was US$43.83. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NasdaqGS:GLPI Insider Trading Volume June 29th 2021

I will like Gaming and Leisure Properties better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Gaming and Leisure Properties Insiders Bought Stock Recently

We saw some Gaming and Leisure Properties insider buying shares in the last three months. Independent Director Evan Urdang shelled out US$46k for shares in that time. It's great to see that insiders are only buying, not selling. However, in this case the amount invested recently is quite small.

Insider Ownership of Gaming and Leisure Properties

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. Gaming and Leisure Properties insiders own 5.3% of the company, currently worth about US$566m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Gaming and Leisure Properties Insider Transactions Indicate?

Our data shows a little insider buying, but no selling, in the last three months. Overall the buying isn't worth writing home about. It's great to see high levels of insider ownership, but looking back over the last year, we'd need to see more buying to gain confidence from the Gaming and Leisure Properties insider transactions. While we like knowing 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. Case in point: We've spotted 3 warning signs for Gaming and Leisure Properties you should be aware of, and 1 of them makes us a bit uncomfortable.

Of course Gaming and Leisure Properties may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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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