While it’s not a huge buy, we think it was good to see Lachlan Edwards, the independent non-executive director of Hotel real estate investments (ASX: HPI) recently spent AU $ 68,000 to buy shares, at AU $ 3.40 per share. Although the purchase is not significant, increasing their stake by just 6.8%, this can be interpreted as a good sign.
Consult our latest analysis for hotel real estate investments
Hotel real estate investments Insider transactions over the past year
Notably, this recent purchase by independent non-executive director Lachlan Edwards was not the only time they bought shares of Hotel Property Investments this year. Previously, they had made an even larger purchase of shares worth AU $ 75,000 at a price of AU $ 2.92 per share. While we love to see insider buys, we note that this significant buy was significantly lower than the recent AU $ 3.32 price tag. Because it happened at a lower valuation, it doesn’t tell us much about whether insiders might find today’s price attractive.
Lachlan Edwards bought 104.53,000 shares during the year. The average price per share was AU $ 3.06. The chart below shows insider trading (by companies and individuals) over the past year. If you want to know exactly who sold, for how much and when, just click on the graph below!
Hotel Property Investments is not the only security that insiders buy. For those who like to find winning investments this free list of growing companies with recent insider buys, might be just the ticket.
Do hotel real estate investments boast of strong insider ownership?
I like to look at how many shares insiders own in a company, to help inform my perspective on their alignment with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will have an incentive to build the business for the long term. From our data, it appears that insiders of Hotel Property Investments own 1.4% of the company, worth around A $ 8.2 million. We note, however, that it is possible that insiders may have an indirect interest through a private company or other corporate structure. While better than nothing, we’re not overly impressed with these holdings.
What could insider trading tell us in hotel real estate investments?
It’s good to see the recent insider buy. We also trust the longer term image of insider trading. We would certainly prefer to see higher levels of insider ownership, but analysis of insider trading suggests that Hotel Property Investments insiders expect a bright future. While we love to know what’s going on with insider ownership and trading, we also make sure to consider the risks a stock faces before making any investment decisions. Our analysis shows 5 warning signs for hotel property investments (2 are of concern!) And we strongly recommend that you consult them before investing.
But beware : Hotel real estate investments may not be the best stocks to buy. So take a look at this free list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are the persons who report their transactions to the relevant regulatory body. We currently account for open market transactions and private assignments, but not derivative transactions.
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