Don't Ignore The Insider Selling In Tri Pointe Homes

We wouldn't blame Tri Pointe Homes, Inc. (NYSE:TPH) shareholders if they were a little worried about the fact that Thomas Mitchell, the President & COO recently netted about US$3.0m selling shares at an average price of US$39.15. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 7.0%.

Check out our latest analysis for Tri Pointe Homes

The Last 12 Months Of Insider Transactions At Tri Pointe Homes

Notably, that recent sale by Thomas Mitchell is the biggest insider sale of Tri Pointe Homes shares that we've seen in the last year. So what is clear is that an insider saw fit to sell at around the current price of US$36.81. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

In the last year Tri Pointe 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of Tri Pointe Homes

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. It appears that Tri Pointe Homes insiders own 2.4% of the company, worth about US$85m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Tri Pointe Homes Insiders?

An insider sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. But since Tri Pointe Homes is profitable and growing, we're not too worried by this. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example - Tri Pointe Homes has 1 warning sign we think you should be aware of.

But note: Tri Pointe 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.