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 we'll take a look at whether insiders have been buying or selling shares in Essential Properties Realty Trust, Inc. (NYSE:EPRT).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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 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 Essential Properties Realty Trust
The President, Peter Mavoides, made the biggest insider sale in the last 12 months. That single transaction was for US$517k worth of shares at a price of US$11.56 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$17.81. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 16% of Peter Mavoides's holding. Peter Mavoides was the only individual insider to sell over the last year.
Over the last year, we can see that insiders have bought 160.43k shares worth US$1.6m. On the other hand they divested 45.00k shares, for US$517k. In total, Essential Properties Realty Trust insiders bought more than they sold over the last year. They paid about US$10.11 on average. To my mind it is good that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Have Essential Properties Realty Trust Insiders Traded Recently?
We have seen a bit of insider selling at Essential Properties Realty Trust, over the last three months. The selling netted US$517k for President Peter Mavoides. But US$511k was spent on buying, too, . While it's not great to see insider selling, the net amount sold isn't enough for us to want to read anything into it.
Insider Ownership of Essential Properties Realty Trust
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. Insiders own 1.1% of Essential Properties Realty Trust shares, worth about US$18m. 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 Essential Properties Realty Trust Insider Transactions Indicate?
Our data shows a little more insider selling than buying in the last three months. But the difference is small, and thus, not concerning. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Essential Properties Realty Trust and we see no evidence to suggest they are worried about the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Essential Properties Realty Trust. Every company has risks, and we've spotted 5 warning signs for Essential Properties Realty Trust (of which 1 is a bit concerning!) you should know about.
Of course Essential Properties Realty Trust 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.
This article by Simply Wall St is general in nature. 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email email@example.com.