Douglas Elliman Insider Buyers Pleased With US$379k Return On Investment

Insiders who bought Douglas Elliman Inc. (NYSE:DOUG) stock lover the last 12 months are probably not as affected by last week’s 21% loss. After accounting for the recent loss, the US$2.60m worth of shares they purchased is now worth US$2.98m, suggesting a good return on their investment.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Douglas Elliman

Douglas Elliman Insider Transactions Over The Last Year

The CEO & Chairman of the Board Michael Liebowitz made the biggest insider purchase in the last 12 months. That single transaction was for US$1.8m worth of shares at a price of US$1.68 each. That implies that an insider found the current price of US$1.69 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. In this case we're pleased to report that the insider purchases were made at close to current prices.

In the last twelve months insiders purchased 1.76m shares for US$2.6m. But they sold 1.08m shares for US$1.8m. In the last twelve months there was more buying than selling by Douglas Elliman insiders. The average buy price was around US$1.47. To my mind it is good that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insider Ownership Of Douglas Elliman

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. Douglas Elliman insiders own about US$35m worth of shares. That equates to 21% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Douglas Elliman Insider Transactions Indicate?

We can't make any useful conclusions about recent trading, since insider buying and selling has been balanced. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Douglas Elliman and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Douglas Elliman. In terms of investment risks, we've identified 2 warning signs with Douglas Elliman and understanding these should be part of your investment process.

Of course Douglas Elliman may not be the best stock to buy. So you may wish to see this free collection of high quality 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.