Insiders At Alarm.com Holdings Sold US$2.6m In Stock, Alluding To Potential Weakness

The fact that multiple Alarm.com Holdings, Inc. (NASDAQ:ALRM) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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Alarm.com Holdings Insider Transactions Over The Last Year

The President of Platforms Business, Daniel Kerzner, made the biggest insider sale in the last 12 months. That single transaction was for US$521k worth of shares at a price of US$66.40 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$58.63). So it is hard to draw any strong conclusion from it.

Insiders in Alarm.com Holdings didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for Alarm.com Holdings

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Alarm.com Holdings Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Alarm.com Holdings shares. Specifically, insiders ditched US$102k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Does Alarm.com Holdings Boast High Insider Ownership?

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. Alarm.com Holdings insiders own 4.9% of the company, currently worth about US$142m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Alarm.com Holdings Tell Us?

Insiders sold Alarm.com Holdings shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. On the plus side, Alarm.com Holdings makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Alarm.com Holdings.

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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.