We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Apollo Commercial Real Estate Finance, Inc. (NYSE:ARI), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
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.'
Apollo Commercial Real Estate Finance Insider Transactions Over The Last Year
In fact, the recent sale by Chairman of the Board Michael Salvati was not their only sale of Apollo Commercial Real Estate Finance shares this year. They previously made an even bigger sale of -US$380.4k worth of shares at a price of US$19.02 per share. That means that an insider was selling shares at around the current price of US$18.78. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.
In the last twelve months insiders netted US$754k for 40000 shares sold. Insiders in Apollo Commercial Real Estate Finance didn't buy any shares in the last year. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Apollo Commercial Real Estate Finance better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders at Apollo Commercial Real Estate Finance Have Sold Stock Recently
The last three months saw significant insider selling at Apollo Commercial Real Estate Finance. In total, Michael Salvati dumped US$380k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
Insider Ownership of Apollo Commercial Real Estate Finance
Many investors like to check how much of a company is owned by 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. From our data, it seems that Apollo Commercial Real Estate Finance insiders own 0.3% of the company, worth about US$9.7m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
So What Does This Data Suggest About Apollo Commercial Real Estate Finance Insiders?
An insider sold Apollo Commercial Real Estate Finance shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. When you combine this with the relatively low insider ownership, we are very cautious about the stock. We'd certainly think twice before buying! Of course, the future is what matters most. So if you are interested in Apollo Commercial Real Estate Finance, you should check out this free report on analyst forecasts for the company.
But note: Apollo Commercial Real Estate Finance may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.