We often see insiders buying up shares in companies that perform well over the long term. 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 Tanger Factory Outlet Centers, Inc. (NYSE:SKT).
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 on the market. 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. 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 Tanger Factory Outlet Centers
Executive Vice President of Leasing Lisa Morrison made the biggest insider sale in the last 12 months. That single transaction was for US$203k worth of shares at a price of US$23.89 each. So what is clear is that an insider saw fit to sell at around the current price of US$20.71. While their view may have changed since the sale, this is not a particularly positive fact. We usually pause to reflect on the potential that a stock has a high valuation, if insiders have been selling at around the current price.
In the last twelve months insiders netted US$632k for 27.40k shares sold. All up, insiders sold more shares in Tanger Factory Outlet Centers than they bought, over the last year. The sellers received a price of around US$23.07, on average. It’s not particularly great to see insiders were selling shares around current prices. But we don’t put too much weight on the insider selling, since sellers could have personal reasons. 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!
I will like Tanger Factory Outlet Centers better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
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. Insiders own 2.2% of Tanger Factory Outlet Centers shares, worth about US$44m. 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 Tanger Factory Outlet Centers Insider Transactions Indicate?
The fact that there have been no Tanger Factory Outlet Centers insider transactions recently certainly doesn’t bother us. Our analysis of Tanger Factory Outlet Centers insider transactions leaves us cautious. The modest level of insider ownership is, at least, some comfort. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
But note: Tanger Factory Outlet Centers 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.
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