It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Hudson Pacific Properties, Inc. (NYSE:HPP), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. 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 Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
View our latest analysis for Hudson Pacific Properties
The Last 12 Months Of Insider Transactions At Hudson Pacific Properties
Over the last year, we can see that the biggest insider sale was by the Chairman & CEO, Victor Coleman, for US$2.0m worth of shares, at about US$26.00 per share. That means that an insider was selling shares at slightly below the current price (US$27.92). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it’s only a weak signal. We note that the biggest single sale was only 9.5% of Victor Coleman’s holding.
In total, Hudson Pacific Properties insiders sold more than they bought over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
NYSE:HPP Insider Trading Volume July 5th 2021
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Does Hudson Pacific Properties Boast High Insider Ownership?
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. Insiders own 2.1% of Hudson Pacific Properties shares, worth about US$90m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Hudson Pacific Properties Tell Us?
It doesn’t really mean much that no insider has traded Hudson Pacific Properties shares in the last quarter. Our analysis of Hudson Pacific Properties insider transactions leaves us cautious. But it’s good to see that insiders own shares in the company. So while it’s helpful to know what insiders are doing in terms of buying or selling, it’s also helpful to know the risks that a particular company is facing. While conducting our analysis, we found that Hudson Pacific Properties has 1 warning sign and it would be unwise to ignore it.
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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