Stock Analysis

Selling US$2.5m worth of stock earlier this year was a lucrative decision for Holdings, Inc. (NASDAQ:ALRM) insiders

Source: Shutterstock Holdings, Inc.'s (NASDAQ:ALRM) stock rose 10% last week, but insiders who sold US$2.5m worth of stock over the last year are probably in a more advantageous position. Selling at an average price of US$67.04, which is higher than the current price, may have been the best move for these insiders because their investment would have been worth less now than when they sold.

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.

View our latest analysis for Holdings Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the CFO & Principal Accounting Officer, Steve Valenzuela, sold US$516k worth of shares at a price of US$75.60 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of US$58.24. So it may not shed much light on insider confidence at current levels. Holdings insiders didn't buy any shares over 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!

NasdaqGS:ALRM Insider Trading Volume February 3rd 2023

I will like Holdings better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Holdings insiders own about US$141m worth of shares (which is 4.8% 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.

So What Do The Holdings Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Holdings shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Holdings insiders selling. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To that end, you should learn about the 3 warning signs we've spotted with Holdings (including 1 which makes us a bit uncomfortable).

Of course Holdings 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, but not derivative transactions.

What are the risks and opportunities for Holdings? Holdings, Inc. provides various Internet of Things (IoT) and solutions for residential, multi-family, small business, and enterprise commercial markets in North America and internationally.

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  • Earnings have grown 15.5% per year over the past 5 years


  • Earnings are forecast to decline by an average of 39.2% per year for the next 3 years

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