REIT Insiders Stepping Up to the Plate

This sector has been a hive of insider buying of late.

Iain Butler

Chief Investment Advisor, Motley Fool Canada Fool since November 2012 Iain Butler is Lead Advisor for Stock Advisor Canada. He is also the Chief Investment Advisor for Motley Fool Canada. Before joining the Fool, Iain was a “buy-side” analyst and through this experience is well-versed in the idiosyncratic ways of the Canadian market. His investing interests are centred on scouring the market for interesting businesses that trade at reasonable prices and offer an appealing risk/reward relationship. Since joining the Fool in 2012, Iain dedicates each day to spreading Foolishness throughout this great country!

Published June 25, 2013 10:53 am EDT

For reasons that we outlined in a post last week, REITs have not been holding up very well of late. In a nutshell, rising interest rates are bad for this sector.

Their recent performance however has spurred one group of investors to step up to the plate and begin buying these names. According to Ted Dixon, CEO of INK Research, the “30-day REIT indicator is currently 800 per cent”. What this indicates is that there is buying in 8 REITs for every one that is being sold. This compares to the indicator for the TSX which stands at just 172.9 per cent.

We went to Mr. Dixon’s site and had a peek to see just which REITs had most recently experienced this bout of bullish activity. Our findings are summarized in the table below:

Company Name	Buyer	Position	Value
Morguard REIT (TSX: MRT.UN)	Morguard Corp.	Largest shareholder	$1,123,090
Cdn REIT (TSX:REF.UN)	Andrew Hoffman	Board member	$42,300
	James Fisher	Board member	$43,000
First Capital (TSX:FCR)	Dori Segal	CEO	$117,000*
H+R REIT (TSX: HR.UN)	Larry Froom	CFO	$33,760

*Segal exercised options to acquire his shares

Foolish Takeaway

As the old saying goes, there are plenty of reasons why an insider might sell a stock. There is however just one reason why they would buy. And, if an academic report that we profiled several weeks ago is any indication, the transaction you want to focus on here is the H+R purchase. The study suggests that when the CFO is buying, you should be too.

Canada’s REIT sector has acted as a haven for investors that are looking for yield. To add some diversity to your income-producing portfolio, simply click here to download our FREE report “13 High Yielding Stocks to Buy Today”.

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Fool contributor Iain Butler does not own any of the companies mentioned in this report. The Motley Fool has no position in any stocks mentioned at this time