We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Park Hotels & Resorts Inc. (NYSE:PK).
Do Insider Transactions Matter?
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 don't think shareholders should simply follow insider transactions. 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'.
Park Hotels & Resorts Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Independent Director, Stephen Sadove, for US$407k worth of shares, at about US$21.77 per share. That means that an insider was selling shares at around the current price of US$20.51. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive). Stephen Sadove was the only individual insider to sell over the last year.
Happily, we note that in the last year insiders paid US$541k for 50.00k shares. But insiders sold 18.89k shares worth US$407k. In total, Park Hotels & Resorts insiders bought more than they sold 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!
Park Hotels & Resorts is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Park Hotels & Resorts Insiders Are Selling The Stock
The last quarter saw substantial insider selling of Park Hotels & Resorts shares. In total, Independent Director Stephen Sadove dumped US$407k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
Insider Ownership of Park Hotels & Resorts
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Park Hotels & Resorts insiders own 1.1% of the company, worth about US$55m. 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 Do The Park Hotels & Resorts Insider Transactions Indicate?
An insider sold stock recently, but they haven't been buying. But we take heart from prior transactions. And insiders do own shares. So we're happy enough to look past some selling. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To help with this, we've discovered 2 warning signs (1 is concerning!) that you ought to be aware of before buying any shares in Park Hotels & Resorts.
Of course Park Hotels & Resorts 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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