Whilst it may not be a huge deal, we thought it was good to see that the Centuria Office REIT (ASX:COF) Independent Non-Executive Director, Peter Done, recently bought AU$71k worth of stock, for AU$2.04 per share. While we're hesitant to get too excited about a purchase of that size, we do note it increased their holding by a solid 15%.
The Last 12 Months Of Insider Transactions At Centuria Office REIT
In fact, the recent purchase by Independent Non-Executive Director Peter Done was not their only acquisition of Centuria Office REIT shares this year. They previously made an even bigger purchase of AU$79k worth of shares at a price of AU$2.50 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$2.01). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
While Centuria Office REIT insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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).
Does Centuria Office REIT Boast High Insider Ownership?
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. A high insider ownership often makes company leadership more mindful of shareholder interests. From looking at our data, insiders own AU$1.5m worth of Centuria Office REIT stock, about 0.1% of the company. However, it's possible that insiders might have an indirect interest through a more complex structure. I generally like to see higher levels of ownership.
So What Does This Data Suggest About Centuria Office REIT Insiders?
It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Centuria Office REIT insiders are reasonably well aligned, and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For instance, we've identified 4 warning signs for Centuria Office REIT (1 can't be ignored) you should be aware of.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.