Fathom Holdings Insiders Enjoying US$366k Appreciation On US$1.13m Investment

Fathom Holdings Inc. (NASDAQ:FTHM) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 14%, resulting in a US$4.7m rise in the company's market capitalisation, translating to a gain of 32% on their initial investment. In other words, the original US$1.13m purchase is now worth US$1.49m.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At Fathom Holdings

In the last twelve months, the biggest single purchase by an insider was when Independent Chair of the Board Scott Flanders bought US$500k worth of shares at a price of US$0.72 per share. We do like to see buying, but this purchase was made at well below the current price of US$1.41. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

In the last twelve months insiders purchased 1.06m shares for US$1.1m. On the other hand they divested 114.54k shares, for US$297k. Overall, Fathom Holdings insiders were net buyers during the last year. They paid about US$1.06 on average. We don't deny that it is nice to see insiders buying stock in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. 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!

Check out our latest analysis for Fathom Holdings

Fathom Holdings is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Does Fathom Holdings Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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. Fathom Holdings insiders own about US$15m worth of shares. That equates to 38% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Fathom Holdings Insider Transactions Indicate?

The fact that there have been no Fathom Holdings insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. Insiders own shares in Fathom Holdings and we see no evidence to suggest they are worried about the future. 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 instance, we've identified 4 warning signs for Fathom Holdings (1 doesn't sit too well with us) you should be aware of.

But note: Fathom 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.

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.