Insider Spends US$1.9m Buying More Shares In AppFolio

Those following along with AppFolio, Inc. (NASDAQ:APPF) will no doubt be intrigued by the recent purchase of shares by Alexander Wolf, Independent Director of the company, who spent a stonking US$1.9m on stock at an average price of US$215. 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 4.3%.

See our latest analysis for AppFolio

AppFolio Insider Transactions Over The Last Year

The Independent Director, Timothy Bliss, made the biggest insider sale in the last 12 months. That single transaction was for US$15m worth of shares at a price of US$228 each. That means that an insider was selling shares at around the current price of US$216. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

All up, insiders sold more shares in AppFolio than they bought, over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like AppFolio better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership Of AppFolio

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. AppFolio insiders own about US$2.4b worth of shares (which is 31% 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 AppFolio Insider Transactions Indicate?

The insider sales have outweighed the insider buying, at AppFolio, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. But it is good to see that AppFolio is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. Case in point: We've spotted 2 warning signs for AppFolio you should be aware of, and 1 of them is a bit unpleasant.

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.

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.