Some of the losses seen by insiders who purchased US$1.1m worth of Redfin Corporation (NASDAQ:RDFN) shares over the past year were recovered after the stock increased by 8.7% over the past week. However, the purchase is proving to be an expensive wager as insiders are yet to get ahead of their losses which currently stand at US$205k since the time of purchase.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
However if you’d rather see where the opportunities and risks are within RDFN’s industry, you can check out our analysis on the US Real Estate industry.
The Last 12 Months Of Insider Transactions At Redfin
The Independent Director Bradley Singer made the biggest insider purchase in the last 12 months. That single transaction was for US$560k worth of shares at a price of US$11.20 each. That means that an insider was happy to buy shares at above the current price of US$8.49. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. 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.
In the last twelve months Redfin insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
NasdaqGS:RDFN Insider Trading Volume September 12th 2022
Redfin 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.
Does Redfin Boast High 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. It appears that Redfin insiders own 3.5% of the company, worth about US$32m. 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 Do The Redfin Insider Transactions Indicate?
The fact that there have been no Redfin insider transactions recently certainly doesn’t bother us. On a brighter note, the transactions over the last year are encouraging. Overall we don’t see anything to make us think Redfin insiders are doubting the company, and they do own shares. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Redfin. While conducting our analysis, we found that Redfin has 3 warning signs and it would be unwise to ignore them.
But note: Redfin 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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