When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Arbor Realty Trust, Inc.'s (NYSE:ABR) instance, it's good news for shareholders.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
The Last 12 Months Of Insider Transactions At Arbor Realty Trust
In the last twelve months, the biggest single purchase by an insider was when Chairman Ivan Kaufman bought US$480k worth of shares at a price of US$12.05 per share. Even though the purchase was made at a significantly lower price than the recent price (US$13.60), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
While Arbor Realty Trust insiders bought shares during the last year, they didn't sell. 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
Insiders At Arbor Realty Trust Have Bought Stock Recently
Over the last quarter, Arbor Realty Trust insiders have spent a meaningful amount on shares. Specifically, insider David Friedman bought US$71k worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.
Insider Ownership Of Arbor Realty Trust
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Arbor Realty Trust insiders own 2.2% of the company, worth about US$60m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Arbor Realty Trust Tell Us?
The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. Insiders likely see value in Arbor Realty Trust shares, given these transactions (along with notable insider ownership of the company). So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 2 warning signs for Arbor Realty Trust (1 doesn't sit too well with us!) and we strongly recommend you look at them before investing.
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 of direct interests only, but not derivative transactions or indirect interests.
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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.