Nasdaq-Listed Companies

Should You Take Comfort From Insider Transactions At Wheeler Real Estate Investment Trust, Inc. (NASDAQ:WHLR)?

We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Wheeler Real Estate Investment Trust, Inc. (NASDAQ:WHLR).

What Is Insider Buying?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.

We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

Wheeler Real Estate Investment Trust Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Independent Director, Andrew Jones, for US$127k worth of shares, at about US$3.51 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$4.05. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was 100% of Andrew Jones's stake. The only individual insider seller over the last year was Andrew Jones.

Happily, we note that in the last year insiders paid US$282k for 134.95k shares. On the other hand they divested 48.57k shares, for US$170k. In the last twelve months there was more buying than selling by Wheeler Real Estate Investment Trust insiders. They paid about US$2.09 on average. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today's share price. You can see the insider transactions (by companies and 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!

insider-trading-volumeNasdaqCM:WHLR Insider Trading Volume May 14th 2021

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insiders at Wheeler Real Estate Investment Trust Have Sold Stock Recently

Over the last three months, we've seen notably more insider selling, than insider buying, at Wheeler Real Estate Investment Trust. We note Independent Director Andrew Jones cashed in US$170k worth of shares. On the flip side, Independent Director Kerry Campbell spent US$93k on purchasing shares. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the shares are not cheap.

Insider Ownership of Wheeler Real Estate Investment Trust

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. 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 Wheeler Real Estate Investment Trust insiders own 13% of the company, worth about US$5.1m. But they may have an indirect interest through a corporate structure that we haven't picked up on. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Do The Wheeler Real Estate Investment Trust Insider Transactions Indicate?

Unfortunately, there has been more insider selling of Wheeler Real Estate Investment Trust stock, than buying, in the last three months. But we take heart from prior transactions. But insiders own relatively little of the company, from what we can see. So the company doesn't look great on this analysis. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example - Wheeler Real Estate Investment Trust has 3 warning signs we think you should be aware of.

Of course Wheeler Real Estate Investment Trust may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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