We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So we’ll take a look at whether insiders have been buying or selling shares in James River Group Holdings, Ltd. (NASDAQ:JRVR).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. 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’.
Want to help shape the future of investing tools? Participate in a short research study and receive a subscription valued at $60.
The Last 12 Months Of Insider Transactions At James River Group Holdings
Over the last year, we can see that the biggest insider sale was by Director Michael Oakes for US$851k worth of shares, at about US$37.51 per share. So it’s clear an insider wanted to take some cash off the table, even slightly below the current price of US$38.27. Even though it doesn’t necessarily mean anything, that’s certainly not a positive sign, in our book. We generally consider it a negative if insiders have been selling on market, especially if they did so below the current price. We note that the biggest single sale was only 43.3% of Michael Oakes’s holding. The only individual insider seller over the last year was Michael Oakes.
Michael Oakes sold a total of 40.00k shares over the year at an average price of US$37.08. 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!
I will like James River Group Holdings better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Does James River Group Holdings Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. James River Group Holdings insiders own about US$33m 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 Does This Data Suggest About James River Group Holdings Insiders?
It doesn’t really mean much that no insider has traded James River Group Holdings shares in the last quarter. We don’t take much encouragement from the transactions by James River Group Holdings insiders. But we do like the fact that insiders own a fair chunk of the company. Of course, the future is what matters most. So if you are interested in James River Group Holdings, you should check out this free report on analyst forecasts for the company.
Of course James River Group Holdings may not be the best stock to buy. So you may wish to see this free collection of high quality 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.