Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Real Estate Investors Plc (LON:RLE), that sends out a positive message to the company’s shareholders.
Although we don’t think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
View our latest analysis for Real Estate Investors
The Last 12 Months Of Insider Transactions At Real Estate Investors
Over the last year, we can see that the biggest insider purchase was by Finance Director Marcus Hugh Daly for UK£92k worth of shares, at about UK£0.37 per share. That means that even when the share price was higher than UK£0.34 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
Real Estate Investors insiders may have bought shares in the last year, but they didn’t sell any. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
Insiders At Real Estate Investors Have Bought Stock Recently
It’s good to see that Real Estate Investors insiders have made notable investments in the company’s shares. In total, insiders bought UK£131k worth of shares in that time, and we didn’t record any sales whatsoever. That shows some optimism about the company’s future.
Insider Ownership
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data indicates that Real Estate Investors insiders own about UK£7.3m worth of shares (which is 13% of the company). However, it’s possible that insiders might have an indirect interest through a more complex structure. Whilst better than nothing, we’re not overly impressed by these holdings.
So What Does This Data Suggest About Real Estate Investors Insiders?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. However, we note that the company didn’t make a profit over the last twelve months, which makes us cautious. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Real Estate Investors insiders are expecting a bright future. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Real Estate Investors. Our analysis shows 3 warning signs for Real Estate Investors (1 is potentially serious!) and we strongly recommend you look at these before investing.
Of course Real Estate Investors 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 of direct interests only, but not derivative transactions or indirect interests.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.