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Founder & Chairman Emeritus B. Hughes Just Bought Shares In American Homes 4 Rent (NYSE:AMH)

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Simply Wall St
·3 min read
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American Homes 4 Rent (NYSE:AMH) shareholders (or potential shareholders) will be happy to see that the Founder & Chairman Emeritus, B. Hughes, recently bought a whopping US$31m worth of stock, at a price of US$28.31. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 6.6%.

Check out our latest analysis for American Homes 4 Rent

The Last 12 Months Of Insider Transactions At American Homes 4 Rent

In fact, the recent purchase by B. Hughes was the biggest purchase of American Homes 4 Rent shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to buy, at around the current price, which is US$29.18. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for American Homes 4 Rent share holders is that insiders were buying at near the current price.

Happily, we note that in the last year insiders paid US$77m for 2.74m shares. On the other hand they divested 2936099 shares, for US$69m. In total, American Homes 4 Rent insiders bought more than they sold over the last year. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

NYSE:AMH Recent Insider Trading, March 11th 2020
NYSE:AMH Recent Insider Trading, March 11th 2020

American Homes 4 Rent is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does American Homes 4 Rent Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company 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. American Homes 4 Rent insiders own about US$1.2b worth of shares (which is 12% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About American Homes 4 Rent Insiders?

The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about American Homes 4 Rent. One for the watchlist, at least! 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. For example - American Homes 4 Rent has 1 warning sign we think you should be aware of.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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, but not derivative transactions.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.