Bargain Hunters Take Note: Insider Cluster-Buying At SHO

A particularly strong insider buying signal is what we call a "cluster-buy" where three or more different insiders make open market purchases within a short period of one another. At Sunstone Hotel Investors Inc (Symbol: SHO), 3 different insiders purchased 85,442 shares at an average price of $8.28/share, for a total of $707,752, with the most recent purchase on March 31, 2020.

Presumably the only reason an insider would take their hard-earned cash and use it to buy stock of their company in the open market, is that they expect to make money. So when multiple insiders all decide to make purchases around the same time, it could be a strong indication that the stock is undervalued. Below is a table summarizing the insider buys that make up this "cluster":

Purchased Insider Title Shares Price/Share Value
03/18/2020 Douglas M. Pasquale Director 17,500 $7.04 $123,152.50
03/31/2020 Murray J. McCabe Director 17,942 $8.36 $150,004.09
03/31/2020 John V. Arabia President & CEO 50,000 $8.69 $434,595.00

The chart below shows the one year performance of SHO shares, versus its 200 day moving average. Note that SHO's low point in its 52 week range is $5.75 per share, with $15.03 as the 52 week high point — that compares with a last trade of $8.40, with shares currently trading off about 0.2% on the day.

Sunstone Hotel Investors Inc Chart

The current annualized dividend paid by Sunstone Hotel Investors Inc is $0.2/share, currently paid in quarterly installments, and its most recent dividend ex-date was on 03/30/2020. Below is a long-term dividend history chart for SHO, which can be of good help in judging whether the most recent dividend with approx. 2.4% annualized yield is likely to continue.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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