We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Diamond Hill Investment Group, Inc. (NASDAQ:DHIL).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
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The Last 12 Months Of Insider Transactions At Diamond Hill Investment Group
Over the last year, we can see that the biggest insider sale was by Chairman of the Board Roderick Dillon for US$779k worth of shares, at about US$215 per share. While the sale doesn’t make us feel confident, we do note it was conducted at a price well above the current share price, which is US$158. So it may not tell us anything about how insiders feel about the current share price.
Over the last year, we note insiders sold 9.62k shares worth US$1.9m. In total, Diamond Hill Investment Group insiders sold more than they bought over the last year. The sellers received a price of around US$195, on average. Insider selling doesn’t make us excited to buy. But the selling was at much higher prices than the current share price (US$158), so it probably doesn’t tell us a lot about the value on offer today. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at Diamond Hill Investment Group Have Sold Stock Recently
The last three months saw significant insider selling at Diamond Hill Investment Group. In total, Roderick Dillon sold US$418k worth of shares in that time, and we didn’t record any purchases whatsoever. Overall this makes us a bit cautious, but it’s not the be all and end all.
Insider Ownership of Diamond Hill Investment Group
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 6.7% of Diamond Hill Investment Group shares, worth about US$35m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Do The Diamond Hill Investment Group Insider Transactions Indicate?
An insider hasn’t bought Diamond Hill Investment Group 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. On the plus side, Diamond Hill Investment Group makes money, and is growing profits. Insider ownership isn’t particularly high, so this analysis makes us cautious about the company. We’d think twice before buying! Along with insider transactions, I recommend checking if Diamond Hill Investment Group is growing revenue. This free chart of historic revenue and earnings should make that easy.
But note: Diamond Hill Investment Group 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.