Some Starwood Property Trust, Inc. (NYSE:STWD) shareholders may be a little concerned to see that the President & MD, Jeffrey DiModica, recently sold a substantial US$2.0m worth of stock at a price of US$20.28 per share. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 7.5%.
The Last 12 Months Of Insider Transactions At Starwood Property Trust
Notably, that recent sale by Jeffrey DiModica is the biggest insider sale of Starwood Property Trust shares that we've seen in the last year. That means that even when the share price was slightly below the current price of US$20.33, an insider wanted to cash in some shares. 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. 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. It is worth noting that this sale was only 7.5% of Jeffrey DiModica's holding.
Jeffrey DiModica divested 130.11k shares over the last 12 months at an average price of US$20.30. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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).
Insider Ownership Of Starwood Property Trust
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Starwood Property Trust insiders own about US$327m worth of shares (which is 5.1% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Starwood Property Trust Insider Transactions Indicate?
An insider hasn't bought Starwood Property Trust stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. 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. At Simply Wall St, we've found that Starwood Property Trust has 3 warning signs (2 are significant!) that deserve your attention before going any further with your analysis.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 of direct interests only, but not derivative transactions or indirect interests.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.