Insiders who purchased US$230k worth of Heritage Insurance Holdings, Inc. (NYSE:HRTG) shares over the past year recouped some of their losses after price gained 35% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled US$31k since the time of purchase.
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.
See our latest analysis for Heritage Insurance Holdings
The Last 12 Months Of Insider Transactions At Heritage Insurance Holdings
Over the last year, we can see that the biggest insider purchase was by Chairman Richard Widdicombe for US$58k worth of shares, at about US$5.84 per share. That means that an insider was happy to buy shares at above the current price of US$3.50. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
Heritage Insurance Holdings insiders may have bought shares in the last year, but they didn’t sell any. Their average price was about US$4.04. I’d consider this a positive as it suggests insiders see value at around the current price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Heritage Insurance Holdings 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.
Heritage Insurance Holdings Insiders Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Heritage Insurance Holdings. Overall, three insiders shelled out US$89k for shares in the company — and none sold. This makes one think the business has some good points.
Does Heritage Insurance 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. We usually like to see fairly high levels of insider ownership. Insiders own 18% of Heritage Insurance Holdings shares, worth about US$16m. 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 Heritage Insurance Holdings Tell Us?
It’s certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn’t make a profit over the last twelve months, which makes us cautious. Given that insiders also own a fair bit of Heritage Insurance Holdings we think they are probably pretty confident of a bright future. So while it’s helpful to know what insiders are doing in terms of buying or selling, it’s also helpful to know the risks that a particular company is facing. When we did our research, we found 2 warning signs for Heritage Insurance Holdings (1 is concerning!) that we believe deserve your full attention.
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.
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