It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Front Yard Residential Corporation (NYSE:RESI), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. 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’.
Front Yard Residential Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when CEO & Director George Ellison bought US$232k worth of shares at a price of US$8.31 per share. So it’s clear an insider wanted to buy, at around the current price. That means they have been optimistic about the company in the past, though they may have changed their mind. Nonetheless, we consider it positive if insiders want to buy at around the current share price.
Over the last year, we can see that insiders have bought 61.13k shares worth US$508k. Overall, Front Yard Residential insiders were net buyers last year. Their average price was about US$8.31. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price of US$10.13. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Front Yard Residential Insiders Bought Stock Recently
Over the last quarter, Front Yard Residential insiders have spent a meaningful amount on shares. Overall, 5 insiders shelled out US$508k for shares in the company — and none sold. That shows some optimism about the company’s future.
Insider Ownership of Front Yard Residential
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. From our data, it seems that Front Yard Residential insiders own 1.0% of the company, worth about US$5.6m. Whilst better than nothing, we’re not overly impressed by these holdings.
What Might The Insider Transactions At Front Yard Residential Tell Us?
It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss last year, which makes us a little cautious. While the overall levels of insider ownership are below what we’d like to see, the history of transactions imply that Front Yard Residential insiders are reasonably well aligned, and optimistic for the future. Of course, the future is what matters most. So if you are interested in Front Yard Residential, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.