We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Oxbridge Re Holdings Limited (NASDAQ:OXBR), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Oxbridge Re Holdings Insider Transactions Over The Last Year
Allan Martin made the biggest insider purchase in the last 12 months. That single transaction was for US$82k worth of shares at a price of US$1.00 each. Even though the purchase was made at a significantly lower price than the recent price (US$1.26), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn’t tell us much about how insiders feel about the current share price.
Allan Martin bought 177k shares over the last 12 months at an average price of US$0.96. You can see the insider transactions (by 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!
Oxbridge Re Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Oxbridge Re Holdings
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. It appears that Oxbridge Re Holdings insiders own 19% of the company, worth about US$1.4m. 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 Oxbridge Re Holdings Insiders?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. But we don’t feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Oxbridge Re Holdings insiders are well aligned, and that they may think the share price is too low. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
But note: Oxbridge Re Holdings 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.
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