Some Palomar Holdings, Inc. (NASDAQ:PLMR) shareholders may be a little concerned to see that the President, Jon Christianson, recently sold a substantial US$821k worth of stock at a price of US$82.09 per share. That's a big disposal, and it decreased their holding size by 14%, which is notable but not too bad.
The Last 12 Months Of Insider Transactions At Palomar Holdings
The Founder, D. Armstrong, made the biggest insider sale in the last 12 months. That single transaction was for US$4.6m worth of shares at a price of US$58.65 each. That means that even when the share price was below the current price of US$82.37, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 14% of D. Armstrong's stake.
Over the last year we saw more insider selling of Palomar Holdings shares, than buying. 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.
Insider Ownership
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Palomar Holdings insiders own about US$61m worth of shares. That equates to 2.9% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Palomar Holdings Insider Transactions Indicate?
Unfortunately, there has been more insider selling of Palomar Holdings stock, than buying, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. But since Palomar Holdings is profitable and growing, we're not too worried by this. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 1 warning sign with Palomar Holdings and understanding it should be part of your investment process.
But note: Palomar Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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.