Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Third Point Reinsurance Ltd. (NYSE:TPRE).
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 equally, we would consider it foolish to ignore insider transactions altogether. 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 Third Point Reinsurance
Third Point Reinsurance Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the , Daniel Loeb, sold US$11m worth of shares at a price of US$13.15 per share. While we don't usually like to see insider selling, it's more concerning if the sales take price at a lower price. The good news is that this large sale was at well above current price of US$10.62. So it is hard to draw any strong conclusion from it. Daniel Loeb was the only individual insider to sell shares in the last twelve months.
You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
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
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It's great to see that Third Point Reinsurance insiders own 12% of the company, worth about US$114m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Third Point Reinsurance Tell Us?
It doesn't really mean much that no insider has traded Third Point Reinsurance shares in the last quarter. It's great to see high levels of insider ownership, but looking back at the last year, we don't gain confidence from the Third Point Reinsurance insiders selling. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Third Point Reinsurance.