Stock Analysis

As Corporate Office Properties Trust's (NYSE:OFC)) market cap dropped by US$114m, insiders who sold US$1.3m worth of stock were able to offset their losses

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NYSE:OFC
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Over the past year, insiders sold US$1.3m worth of Corporate Office Properties Trust (NYSE:OFC) stock at an average price of US$28.21 per share allowing them to get the most out of their money. The company's market valuation decreased by US$114m after the stock price dropped 3.6% over the past week, but insiders were spared from painful losses.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Corporate Office Properties Trust

The Last 12 Months Of Insider Transactions At Corporate Office Properties Trust

Over the last year, we can see that the biggest insider sale was by the Independent Trustee, Steven Kesler, for US$237k worth of shares, at about US$29.64 per share. That means that an insider was selling shares at around the current price of US$26.98. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

Happily, we note that in the last year insiders paid US$110k for 4.30k shares. On the other hand they divested 46.24k shares, for US$1.3m. In total, Corporate Office Properties Trust insiders sold more than they bought over the last year. 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!

insider-trading-volume
NYSE:OFC Insider Trading Volume October 1st 2021

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Corporate Office Properties Trust insiders own about US$11m worth of shares. That equates to 0.3% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Corporate Office Properties Trust Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. We don't take much encouragement from the transactions by Corporate Office Properties Trust insiders. But we do like the fact that insiders own a fair chunk of the company. 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. Be aware that Corporate Office Properties Trust is showing 2 warning signs in our investment analysis, and 1 of those is a bit unpleasant...

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.

What are the risks and opportunities for Corporate Office Properties Trust?

COPT is a REIT that owns, manages, leases, develops and selectively acquires office and data center properties.

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Rewards

  • Trading at 14.9% below our estimate of its fair value

Risks

  • Earnings are forecast to decline by an average of 0.8% per year for the next 3 years

  • Debt is not well covered by operating cash flow

  • Profit margins (14%) are lower than last year (22.7%)

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Corporate Office Properties Trust

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