Some Dream Finders Homes, Inc. (NYSE:DFH) shareholders may be a little concerned to see that the Non-Independent Director, William Lovett, recently sold a substantial US$2.0m worth of stock at a price of US$40.28 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 1.0%.
The Last 12 Months Of Insider Transactions At Dream Finders Homes
Over the last year, we can see that the biggest insider sale was by the Senior VP & COO, J. Moran, for US$3.8m worth of shares, at about US$31.00 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$35.51. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 10% of J. Moran's holding.
In the last year Dream Finders Homes insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Does Dream Finders Homes Boast High 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. Dream Finders Homes insiders own about US$2.5b worth of shares (which is 75% 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 Does This Data Suggest About Dream Finders Homes Insiders?
Insiders haven't bought Dream Finders Homes stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. But it is good to see that Dream Finders Homes is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. Every company has risks, and we've spotted 1 warning sign for Dream Finders Homes you should know about.
Of course Dream Finders Homes may not be the best stock to buy. So you may wish to see this free collection of high quality 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.