Possible Bearish Signals With Dream Finders Homes Insiders Disposing Stock

Many Dream Finders Homes, Inc. (NYSE:DFH) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Dream Finders Homes

Dream Finders Homes Insider Transactions Over The Last Year

In fact, the recent sale by Founder Patrick Zalupski was not their only sale of 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. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$24.78. So it is hard to draw any strong conclusion from it.

Dream Finders Homes insiders didn't buy any shares over the last year. 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Dream Finders Homes Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Dream Finders Homes shares. In total, Founder Patrick Zalupski sold US$6.9m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Does Dream Finders Homes Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company 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. Dream Finders Homes insiders own 71% of the company, currently worth about US$1.7b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Dream Finders Homes Tell Us?

An insider sold Dream Finders Homes shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. But it is good to see that Dream Finders Homes is growing earnings. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Dream Finders Homes. Every company has risks, and we've spotted 2 warning signs for Dream Finders Homes (of which 1 is a bit unpleasant!) you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com