Possible Bearish Signals With Fathom Holdings Insiders Disposing Stock

Many Fathom Holdings Inc. (NASDAQ:FTHM) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. 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 do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Fathom Holdings

The Last 12 Months Of Insider Transactions At Fathom Holdings

The Founder & Chief Evangelist, Joshua Harley, made the biggest insider sale in the last 12 months. That single transaction was for US$2.0m worth of shares at a price of US$2.00 each. That means that an insider was selling shares at slightly below the current price (US$2.09). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 19% of Joshua Harley's holding.

Over the last year, we can see that insiders have bought 701.83k shares worth US$1.4m. But they sold 1.10m shares for US$2.3m. All up, insiders sold more shares in Fathom Holdings than they bought, over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Fathom Holdings better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Does Fathom Holdings Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It's great to see that Fathom Holdings insiders own 46% of the company, worth about US$20m. 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 Fathom Holdings Insider Transactions Indicate?

We can't make any useful conclusions about recent trading, since insider buying and selling has been balanced. It's great to see high levels of insider ownership, but looking back over the last year, we'd need to see more buying to gain confidence from the Fathom Holdings insider transactions. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To assist with this, we've discovered 5 warning signs that you should run your eye over to get a better picture of Fathom Holdings.

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.