We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in Arbor Realty Trust, Inc. (NYSE:ABR).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. 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’.
See our latest analysis for Arbor Realty Trust
The Last 12 Months Of Insider Transactions At Arbor Realty Trust
Notably, that recent purchase by William Green is the biggest insider purchase of Arbor Realty Trust shares that we’ve seen in the last year. That implies that an insider found the current price of US$13.29 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it’s a good sign on balance, but keep in mind they may no longer see value. Happily, the Arbor Realty Trust insiders decided to buy shares at close to current prices. Notably William Green was also the biggest seller.
Over the last year, we can see that insiders have bought 49.10k shares worth US$461k. On the other hand they divested 9.10k shares, for US$118k. In total, Arbor Realty Trust insiders bought more than they sold over the last year. They paid about US$9.39 on average. We don’t deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today’s share price. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Arbor Realty Trust is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Have Arbor Realty Trust Insiders Traded Recently?
In the last three months, Lead Independent Director William Green bought US$118k. However that only slightly eclipses the sales, US$118k worth of sales. Overall, we don’t think these recent trades are particularly informative, one way or the other.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company 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. Insiders own 3.1% of Arbor Realty Trust shares, worth about US$54m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Arbor Realty Trust Insiders?
Insider buying and selling have balanced each other out in the last three months, so we can’t deduct anything useful from these recent trades. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Arbor Realty Trust and their transactions don’t cause us concern. While we like knowing what’s going on with the insider’s ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To help with this, we’ve discovered 4 warning signs (2 make us uncomfortable!) that you ought to be aware of before buying any shares in Arbor Realty Trust.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
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