American Homes 4 Rent (NYSE:AMH) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 4.6% resulting in a US$623m addition to the company’s market value. As a result, their original purchase of US$2.0m worth of stock is now worth US$2.3m.
Although we don’t think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
Check out our latest analysis for American Homes 4 Rent
The Last 12 Months Of Insider Transactions At American Homes 4 Rent
In the last twelve months, the biggest single purchase by an insider was when insider B. Hughes bought US$2.0m worth of shares at a price of US$36.93 per share. So it’s clear an insider wanted to buy, at around the current price, which is US$40.85. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today’s share price, as the discount to value may have narrowed with the rising price. Happily, the American Homes 4 Rent insiders decided to buy shares at close to current prices.
In the last twelve months insiders purchased 55.23k shares for US$2.0m. On the other hand they divested 32.50k shares, for US$1.4m. Overall, American Homes 4 Rent insiders were net buyers during the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
NYSE:AMH Insider Trading Volume April 2nd 2022
American Homes 4 Rent is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does American Homes 4 Rent 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. I reckon it’s a good sign if insiders own a significant number of shares in the company. American Homes 4 Rent insiders own 6.9% of the company, currently worth about US$1.1b based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At American Homes 4 Rent Tell Us?
The fact that there have been no American Homes 4 Rent insider transactions recently certainly doesn’t bother us. 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 1 shouldn’t be ignored!) you should know about.
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.
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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.