This Insider Has Just Sold Shares In First American Financial

We wouldn't blame First American Financial Corporation (NYSE:FAF) shareholders if they were a little worried about the fact that Dennis Gilmore, the Chairman of the Board recently netted about US$7.1m selling shares at an average price of US$63.60. That sale reduced their total holding by 19% which is hardly insignificant, but far from the worst we've seen.

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The Last 12 Months Of Insider Transactions At First American Financial

In fact, the recent sale by Dennis Gilmore was the biggest sale of First American Financial shares made by an insider individual in the last twelve months, according to our records. So we know that an insider sold shares at around the present share price of US$63.42. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

Insiders in First American Financial didn't buy any shares in the last year. 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!

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Insider Ownership Of First American Financial

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It's great to see that First American Financial insiders own 3.4% of the company, worth about US$225m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The First American Financial Insider Transactions Indicate?

An insider sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. In terms of investment risks, we've identified 3 warning signs with First American Financial and understanding them should be part of your investment process.

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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.