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We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Universal Insurance Holdings, Inc. (NYSE:UVE), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, such insiders must disclose their trading activities, and not trade on inside information.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
Universal Insurance Holdings Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Chairman of the Board & CEO, Sean Downes, for US$907k worth of shares, at about US$45.36 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of US$28.95. So it is hard to draw any strong conclusion from it.
In the last twelve months insiders purchased 36200 shares for US$1.1m. But they sold 101k for US$4.5m. All up, insiders sold more shares in Universal Insurance Holdings than they bought, over the last year. 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!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Universal Insurance Holdings Insiders Bought Stock Recently
Over the last quarter, Universal Insurance Holdings insiders have spent a meaningful amount on shares. Specifically, Chairman of the Board & CEO Sean Downes bought US$444k worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.
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. It appears that Universal Insurance Holdings insiders own 8.3% of the company, worth about US$84m. 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 Universal Insurance Holdings Tell Us?
It's certainly positive to see the recent insider purchase. However, the longer term transactions are not so encouraging. The more recent transactions are a positive, but Universal Insurance Holdings insiders haven't shown the sustained enthusiasm that we look for, although they do own a decent number of shares, overall. So they seem pretty well aligned, overall. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Universal Insurance Holdings.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.