Insider Spends US$200k Buying More Shares In Smith Douglas Homes
Investors who take an interest in Smith Douglas Homes Corp. (NYSE:SDHC) should definitely note that the Founder & Executive Chairman, Thomas Bradbury, recently paid US$10.31 per share to buy US$200k worth of the stock. That's a very solid buy in our book, and increased their holding by a noteworthy 33%.
Smith Douglas Homes Insider Transactions Over The Last Year
In fact, the recent purchase by Founder & Executive Chairman Thomas Bradbury was not their only acquisition of Smith Douglas Homes shares this year. Earlier in the year, they paid US$11.36 per share in a US$257k purchase. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$10.79). Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. 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.
In the last twelve months Smith Douglas Homes insiders were buying shares, but not selling. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
View our latest analysis for Smith Douglas Homes
Smith Douglas Homes is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership Of Smith Douglas Homes
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. From our data, it seems that Smith Douglas Homes insiders own 1.6% of the company, worth about US$8.6m. Whilst better than nothing, we're not overly impressed by these holdings.
So What Do The Smith Douglas Homes Insider Transactions Indicate?
The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Smith Douglas Homes insiders are expecting a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For instance, we've identified 2 warning signs for Smith Douglas Homes (1 shouldn't be ignored) you should be aware of.
But note: Smith Douglas Homes 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 of direct interests only, but not derivative transactions or indirect interests.
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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.