We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in eXp World Holdings, Inc. (NASDAQ:EXPI).
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, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Want to help shape the future of investing tools and platforms? Take the survey and be part of one of the most advanced studies of stock market investors to date.
eXp World Holdings Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when Founder Glenn Sanford sold US$633k worth of shares at a price of US$15.87 per share. That is hardly a positive sign, even though it took place above the latest price (US$10.18). So it is hard to draw any strong conclusion from it.
Over the last year, we note insiders sold 55.98k shares worth US$920k. In total, eXp World Holdings insiders sold more than they bought over the last year. They sold for an average price of about US$16.44. Insider selling doesn’t make us excited to buy. However, we do note that the average sale price was significantly higher than the current share price (which is US$10.18). You can see a visual depiction of insider transactions (by 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!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It’s great to see that eXp World Holdings insiders own 63% of the company, worth about US$388m. 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 eXp World Holdings Insider Transactions Indicate?
The fact that there have been no eXp World Holdings insider transactions recently certainly doesn’t bother us. While we feel good about high insider ownership of eXp World Holdings, we can’t say the same about the selling of shares. Of course, the future is what matters most. So if you are interested in eXp World Holdings, you should check out this free report on analyst forecasts for the company.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.