In the last year, multiple insiders have substantially increased their holdings of American Homes 4 Rent (NYSE:AMH) stock, indicating that insiders’ optimism about the company’s prospects has increased.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At American Homes 4 Rent
Over the last year, we can see that the biggest insider purchase was by Independent Trustee Tamara Gustavson for US$28m worth of shares, at about US$37.01 per share. That means that even when the share price was higher than US$33.25 (the recent price), an insider wanted to purchase shares. 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. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Over the last year, we can see that insiders have bought 1.18m shares worth US$43m. But insiders sold 5.52k shares worth US$197k. In the last twelve months there was more buying than selling by American Homes 4 Rent insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
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.
Insider Ownership Of American Homes 4 Rent
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It’s great to see that American Homes 4 Rent insiders own 7.1% of the company, worth about US$962m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At American Homes 4 Rent Tell Us?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like American Homes 4 Rent insiders are reasonably well aligned (owning significant chunk of the company’s shares) and optimistic for the future. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing American Homes 4 Rent. Every company has risks, and we’ve spotted 4 warning signs for American Homes 4 Rent (of which 2 are concerning!) you should know about.
But note: American Homes 4 Rent may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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