We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 shareholders might well want to know whether insiders have been buying or selling shares in The Macerich Company (NYSE:MAC).
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, most countries require that the company discloses such transactions to the market.
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. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.
The Last 12 Months Of Insider Transactions At Macerich
Over the last year, we can see that the biggest insider sale was by the insider, Sharon Berger, for US$44m worth of shares, at about US$22.02 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$18.70). So it may not shed much light on insider confidence at current levels. Notably Sharon Berger was also the biggest buyer, having purchased US$50m worth of shares.
Over the last year we saw more insider selling of Macerich shares, than buying. The average sell price was around US$17.01. We don't gain confidence from insider selling below the recent share price. But we wouldn't put too much weight on the insider selling. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
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Macerich Insiders Are Selling The Stock
Over the last three months, we've seen a bit of insider selling at Macerich. Senior VP & Chief Accounting Officer Christopher Zecchini only netted US$43k selling shares, in that period. Neither the lack of buying nor the presence of selling is heartening. But the volume sold is so low that it really doesn't bother us.
Does Macerich Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Macerich insiders own 3.9% of the company, currently worth about US$158m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Macerich Insiders?
While there has not been any insider buying in the last three months, there has been selling. But given the selling was modest, we're not worried. While we feel good about high insider ownership of Macerich, we can't say the same about the selling of shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Macerich. For instance, we've identified 4 warning signs for Macerich (1 shouldn't be ignored) you should be aware of.
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.
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