Don't Ignore The Insider Selling In Dream Finders Homes

Some Dream Finders Homes, Inc. (NYSE:DFH) shareholders may be a little concerned to see that the Founder, Patrick Zalupski, recently sold a substantial US$2.0m worth of stock at a price of US$31.10 per share. However, that sale only accounted for 5.2% of their holding, so arguably it doesn't say much about their conviction.

See our latest analysis for Dream Finders Homes

The Last 12 Months Of Insider Transactions At Dream Finders Homes

Notably, that recent sale by Founder Patrick Zalupski was not the only time they sold Dream Finders Homes shares this year. They previously made an even bigger sale of -US$4.4m worth of shares at a price of US$40.77 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of US$30.41. So it may not shed much light on insider confidence at current levels.

In the last year Dream Finders Homes insiders didn't buy any company stock. 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!

I will like Dream Finders Homes better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership Of Dream Finders Homes

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Dream Finders Homes insiders own about US$2.1b worth of shares (which is 71% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Dream Finders Homes Insider Transactions Indicate?

Insiders sold Dream Finders Homes shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. But since Dream Finders Homes is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Dream Finders Homes. To that end, you should learn about the 2 warning signs we've spotted with Dream Finders Homes (including 1 which is significant).

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 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.

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