Stock Analysis

Insiders who sold UDR, Inc.'s (NYSE:UDR) earlier year may find some solace in the 3.4% drop

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NYSE:UDR
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Even though UDR, Inc. (NYSE:UDR) has fallen by 3.4% over the past week , insiders who sold US$809k worth of stock over the past year have had less luck. Given that the average selling price of US$40.44 is still lower than the current share price, insiders would probably have been better off keeping their shares.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for UDR

UDR Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Chairman & CEO, Thomas Toomey, for US$809k worth of shares, at about US$40.44 per share. That means that an insider was selling shares at below the current price (US$40.64). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 2.0% of Thomas Toomey's holding. The only individual insider seller over the last year was Thomas Toomey.

You can see the insider transactions (by companies and 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!

insider-trading-volume
NYSE:UDR Insider Trading Volume March 15th 2023

I will like UDR better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Does UDR 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. I reckon it's a good sign if insiders own a significant number of shares in the company. UDR insiders own about US$77m worth of shares. That equates to 0.5% 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 Does This Data Suggest About UDR Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. Still, the insider transactions at UDR in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some comfort. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 3 warning signs for UDR (of which 1 makes us a bit uncomfortable!) you should know about.

Of course UDR 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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