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 Independence Realty Trust, Inc. (NYSE:IRT).
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.
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 Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
The Last 12 Months Of Insider Transactions At Independence Realty Trust
Over the last year, we can see that the biggest insider sale was by the Director, Richard Ross, for US$62k worth of shares, at about US$10.33 per share. So it’s clear an insider wanted to take some cash off the table, even below the current price of US$14.04. 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. While insider selling is not a positive sign, we can’t be sure if it does mean insiders think the shares are fully valued, so it’s only a weak sign. We note that the biggest single sale was only 18% of Richard Ross’s holding. The only individual insider seller over the last year was Richard Ross.
Richard Ross sold a total of 10000 shares over the year at an average price of US$11.51. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Does Independence Realty Trust Boast High Insider Ownership?
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. From our data, it seems that Independence Realty Trust insiders own 0.7% of the company, worth about US$9.1m. Whilst better than nothing, we’re not overly impressed by these holdings.
So What Does This Data Suggest About Independence Realty Trust Insiders?
It doesn’t really mean much that no insider has traded Independence Realty Trust shares in the last quarter. The insider transactions at Independence Realty Trust are not inspiring us to buy. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. Of course, the future is what matters most. So if you are interested in Independence Realty Trust, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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.
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