Stock Analysis

How Many CubeSmart (NYSE:CUBE) Shares Have Insiders Sold, In The Last Year?

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NYSE:CUBE
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We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell CubeSmart (NYSE:CUBE), you may well want to know whether insiders have been buying or selling.

Do Insider Transactions Matter?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

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The Last 12 Months Of Insider Transactions At CubeSmart

The Independent Chairman of the Board, Marianne Keler, made the biggest insider sale in the last 12 months. That single transaction was for US$314k worth of shares at a price of US$31.45 each. That means that an insider was selling shares at slightly below the current price (US$45.96). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. 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. We note that the biggest single sale was only 17% of Marianne Keler's holding. The only individual insider seller over the last year was Marianne Keler.

The chart below shows insider transactions (by companies and 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!

insider-trading-volume
NYSE:CUBE Insider Trading Volume June 9th 2021

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

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. It appears that CubeSmart insiders own 0.6% of the company, worth about US$57m. 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 Does This Data Suggest About CubeSmart Insiders?

It doesn't really mean much that no insider has traded CubeSmart shares in the last quarter. Still, the insider transactions at CubeSmart in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some comfort. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing CubeSmart. For instance, we've identified 2 warning signs for CubeSmart (1 is significant) you should be aware of.

But note: CubeSmart 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, but not derivative transactions.

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What are the risks and opportunities for CubeSmart?

CubeSmart is a self-administered and self-managed real estate investment trust.

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Rewards

  • Trading at 21.5% below our estimate of its fair value

  • Earnings are forecast to grow 4.08% per year

  • Earnings have grown 11.1% per year over the past 5 years

Risks

  • Debt is not well covered by operating cash flow

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