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 Essential Properties Realty Trust, Inc. (NYSE:EPRT).
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia 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 Essential Properties Realty Trust
Director Stephen Sautel made the biggest insider purchase in the last 12 months. That single transaction was for US$2.8m worth of shares at a price of US$14.00 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$19.01. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
Happily, we note that in the last year insiders bought 268k shares for a total of US$3.8m. In the last twelve months Essential Properties Realty Trust insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Essential Properties Realty Trust is not the only stock insiders are buying. So take a peek at this free list of growing companies with 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 1.2% of Essential Properties Realty Trust shares, worth about US$17m. 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?
There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Essential Properties Realty Trust and their transactions don't cause us concern. Of course, the future is what matters most. So if you are interested in Essential Properties Realty Trust, you should check out this free report on analyst forecasts for the company.
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.
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