Gary Friedman Bought 1.4% More Shares In RH

RH (NYSE:RH) shareholders (or potential shareholders) will be happy to see that the Chairman & CEO, Gary Friedman, recently bought a whopping US$10.0m worth of stock, at a price of US$216. 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 1.4%.

View our latest analysis for RH

RH Insider Transactions Over The Last Year

Notably, that recent purchase by Gary Friedman is the biggest insider purchase of RH shares that we've seen in the last year. We do like to see buying, but this purchase was made at well below the current price of US$244. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

RH is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company 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. It's great to see that RH insiders own 19% of the company, worth about US$822m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At RH Tell Us?

It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about RH. That's what I like to see! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing RH. Every company has risks, and we've spotted 3 warning signs for RH (of which 2 are concerning!) you should know about.

But note: RH 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com