Stock Analysis

Trade Alert: B. Hughes At American Homes 4 Rent (NYSE:AMH), Has Just Spent US$2.0m Buying A Small Number of Shares

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Those following along with American Homes 4 Rent (NYSE:AMH) will no doubt be intrigued by the recent purchase of shares by insider B. Hughes, who spent a stonking US$2.0m on stock at an average price of US$36.93. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 0.3%.

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American Homes 4 Rent Insider Transactions Over The Last Year

In fact, the recent purchase by B. Hughes was not their only acquisition of American Homes 4 Rent shares this year. Earlier in the year, they paid US$29.11 per share in a US$9.9m purchase. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$37.62. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

B. Hughes purchased 412.10k shares over the year. The average price per share was US$30.14. 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!

NYSE:AMH Insider Trading Volume May 18th 2021

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

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. American Homes 4 Rent insiders own about US$1.7b worth of shares (which is 13% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At American Homes 4 Rent Tell Us?

The stark truth for American Homes 4 Rent is that there has been more insider selling than insider buying in the last three months. In contrast, they appear keener if you look at the last twelve months. We are also comforted by the high levels of insider ownership. So the recent selling doesn't worry us. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing American Homes 4 Rent. To help with this, we've discovered 4 warning signs (1 is a bit unpleasant!) that you ought to be aware of before buying any shares in American Homes 4 Rent.

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, but not derivative transactions.

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