Insider buying in REITs surges despite recent pric
Insider buying in REITs surges despite recent price gains
DARCY KEITH
THE GLOBE AND MAIL
Published Monday, Apr. 29 2013, 3:37 PM EDT
Looking west at the VMC. Formerly a vacant pocket of suburbia, 53 of the 442 acres of land in the project is held by SmartCentres and Calloway REIT, which was hunting for new ways to grow. (Diamond Schmitt Architects)
Continued price gains in real estate investment trusts in recent weeks haven’t deterred corporate insiders from snapping up more units.
In fact, insider buying among Canadian REITs has rarely been so robust. INK Research’s residential and commercial REIT indicator is sitting at a lofty 650 per cent. That means there are 6.5 REITS with key insider buying for every one with selling. The indicator was sitting near 225 per cent at the start of this month, suggesting a rapid pickup over the last few weeks from what had already been strong buying levels.
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The S&P/TSX composite REIT index is up 2.5 per cent so far this year, and last week reached a five-year high, notes Ted Dixon, CEO of INK Research. Typically, when a sector sees significant gains, corporate insiders tend to sell to lock in gains.
Not so in the case of REITs. The sector appears to be seeing “momentum” buying, which tends to signal shorter-term investment opportunities for investors looking for clues based on what officers and directors within their own businesses are doing.
“Insiders are signalling that the slow and steady gains seen by REITs are likely at a sustainable pace, at least looking out over the next few months,” Mr. Dixon said in a note.
The broader financials sector, which includes REITs but has many other subsectors, is also continuing to see strong insider buying interest. The financials sector indicator, calculated by taking companies with buy-only transactions over the last 60 days and dividing that number by stocks with sell-only transactions, is back above the 200 per cent mark to its highest level in several months.
“Aside from the REITs, there is no other standout area in the financials sector with insider buying,” noted Mr. Dixon. “Instead, the purchases are taking place across the spectrum in stocks ranging from investment dealer GMP Capital to a number of micro-cap holding companies.”
Insider buying in financials has picked up even as the S&P/TSX financials index has pulled back over the past few weeks. Insiders within the group are showing every sign of being willing to buy when share prices weaken, notes Mr. Dixon.
COMPANIES & INVESTMENTS MENTIONED IN THIS ARTICLE (14)
COMPANYPRICECHANGEVOLUME
Brookfield Canada Office Prop.
BOX.UN-T 29.2 -0.30
-1.017% 11,443
Allied Properties REIT
AP.UN-T 34.26 0.16
0.469% 175,942
Amica Mature Lifestyles
ACC-T 9.28 0.03
0.324% 26,967
Artis REIT
AX.UN-T 16.62 0.02
0.12% 180,396
Boardwalk REIT
BEI.UN-T 64.51 0.23
0.358% 59,010
CAP REIT
CAR.UN-T 25.44 0.16
0.633% 117,175
Cdn. Real Estate Investment
REF.UN-T 46.27 0.31
0.674% 90,737
Chartwell Retirement Residence
CSH.UN-T 11.21 -0.10
-0.884% 297,594
Cominar REIT
CUF.UN-T 23.63 -0.16
-0.673% 217,479
Dundee Industrial REIT
DIR.UN-T 10.65 0.02
0.188% 117,706
H&R Real Estate Invest. Trust
HR.UN-T 24.08 0.15
0.627% 625,560
HealthLease Properties REIT
HLP.UN-T 11.07 0.17
1.56% 90,547
Killam Properties Inc
KMP-T 12.48 0.10
0.808% 142,092
RioCan Real Estate Investment
REI.UN-T 29.21 0.39
1.353% 603,972
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