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Insider Buying: The James River Group Holdings, Ltd. (NASDAQ:JRVR) Chairman & CEO Just Bought US$501k Worth Of Shares

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Simply Wall St
·3 min read
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James River Group Holdings, Ltd. (NASDAQ:JRVR) shareholders (or potential shareholders) will be happy to see that the Chairman & CEO, Jonathan Abram, recently bought a whopping US$501k worth of stock, at a price of US$33.40. 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 3.5%.

Check out our latest analysis for James River Group Holdings

The Last 12 Months Of Insider Transactions At James River Group Holdings

In fact, the recent purchase by Chairman & CEO Jonathan Abram was not their only acquisition of James River Group Holdings shares this year. They previously made an even bigger purchase of US$506k worth of shares at a price of US$35.46 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$34.85). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

While James River Group Holdings insiders bought shares last year, they didn't sell. 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!

NasdaqGS:JRVR Recent Insider Trading, March 16th 2020
NasdaqGS:JRVR Recent Insider Trading, March 16th 2020

James River Group Holdings 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.

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. Insiders own 3.1% of James River Group Holdings shares, worth about US$33m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At James River Group Holdings Tell Us?

It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. Insiders likely see value in James River Group Holdings shares, given these transactions (along with notable insider ownership of the company). 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. While conducting our analysis, we found that James River Group Holdings has 3 warning signs and it would be unwise to ignore these.

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.