The fact that multiple Green Brick Partners, Inc. (NYSE:GRBK) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At Green Brick Partners
Over the last year, we can see that the biggest insider sale was by the Independent Director, Elizabeth Blake, for US$1.3m worth of shares, at about US$51.32 per share. That means that even when the share price was below the current price of US$54.61, an insider wanted to cash in some shares. 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 13% of Elizabeth Blake's holding.
All up, insiders sold more shares in Green Brick Partners than they bought, over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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Green Brick Partners Insiders Bought Stock Recently
Over the last quarter, Green Brick Partners insiders have spent a meaningful amount on shares. We can see that Lead Independent Director Richard Press paid US$156k for shares in the company. No-one sold. This is a positive in our book as it implies some confidence.
Insider Ownership Of Green Brick Partners
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Green Brick Partners insiders own 7.5% of the company, worth about US$184m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Green Brick Partners Insider Transactions Indicate?
The recent insider purchase is heartening. But we can't say the same for the transactions over the last 12 months. Overall, we'd prefer see a more sustained buying from directors, but with a significant insider holding and more recent purchases, Green Brick Partners insiders are reasonably well aligned, and optimistic for the future. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Green Brick Partners.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
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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.