It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Diamond Hill Investment Group, Inc. (NASDAQ:DHIL).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.
The Last 12 Months Of Insider Transactions At Diamond Hill Investment Group
In the last twelve months, the biggest single purchase by an insider was when Chairman of the Board & Lead Independent Director James Laird bought US$290k worth of shares at a price of US$145 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$169. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
Over the last year, we can see that insiders have bought 3.58k shares worth US$513k. But they sold 1.50k shares for US$266k. In the last twelve months there was more buying than selling by Diamond Hill Investment Group insiders. 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!NasdaqGS:DHIL Insider Trading Volume July 13th 2021
Diamond Hill Investment Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Diamond Hill Investment Group Insiders Are Selling The Stock
We've seen more insider selling than insider buying at Diamond Hill Investment Group recently. In that time, CFO & Treasurer Thomas Line dumped US$266k worth of shares. On the flip side, President Heather Brilliant spent US$3.0k on purchasing shares. Because the selling vastly outweighs the buying, we'd say this is a somewhat bearish sign.
Does Diamond Hill Investment Group Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Insiders own 3.5% of Diamond Hill Investment Group shares, worth about US$19m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Diamond Hill Investment Group Tell Us?
Unfortunately, there has been more insider selling of Diamond Hill Investment Group stock, than buying, in the last three months. In contrast, they appear keener if you look at the last twelve months. And insiders do own shares. So we're not overly bothered by recent selling. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. 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 Diamond Hill Investment Group.
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, but not derivative transactions.
This article by Simply Wall St is general in nature. 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 (at) simplywallst.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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