REIT Insiders Stepping Up to the Plate

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

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The Motley Fool

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”.

The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool Canada’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.

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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

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

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