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 Seritage Growth Properties (NYSE:SRG).
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, rules govern insider transactions, and certain disclosures are required.
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 Colombia 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 Seritage Growth Properties
In the last twelve months, the biggest single purchase by an insider was when Chairman of the Board Edward Lampert bought US$2.8m worth of shares at a price of US$36.17 per share. That implies that an insider found the current (approximate) price enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. In any event it’s generally a positive if insiders are buying shares at around the current price.
Over the last year, we can see that insiders have bought 81.96k shares worth US$3.0m. In total, Seritage Growth Properties insiders bought more than they sold over the last year. The average buy price was around US$36.58. Although they bought at below the recent price of US$36.96 per share, it is good to see that insiders are willing to invest in the company. You can see a visual depiction of insider transactions over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It’s great to see that Seritage Growth Properties insiders own 5.2% of the company, worth about US$107m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Seritage Growth Properties Tell Us?
The fact that there have been no Seritage Growth Properties insider transactions recently certainly doesn’t bother us. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Seritage Growth Properties insiders feel good about the company’s future. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Seritage Growth Properties.
But note: Seritage Growth Properties 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.