It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Westwood Holdings Group, Inc. (NYSE:WHG), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. 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 Westwood Holdings Group
Over the last year, we can see that the biggest insider purchase was by Independent Director Raymond Wooldridge for US$123k worth of shares, at about US$12.29 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$11.35). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
Happily, we note that in the last year insiders paid US$350k for 25.00k shares. But insiders sold 5.22k shares worth US$110k. In the last twelve months there was more buying than selling by Westwood Holdings Group insiders. They paid about US$14.00 on average. I'd consider this a positive as it suggests insiders see value at around the current price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Westwood Holdings Group is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Westwood Holdings Group Insiders Bought Stock Recently
It's good to see that Westwood Holdings Group insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought US$236k worth of shares. This makes one think the business has some good points.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Insiders own 11% of Westwood Holdings Group shares, worth about US$9.6m, according to our data. Whilst better than nothing, we're not overly impressed by these holdings.
What Might The Insider Transactions At Westwood Holdings Group Tell Us?
It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Westwood Holdings Group stock. 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. For instance, we've identified 5 warning signs for Westwood Holdings Group (1 doesn't sit too well with us) you should be aware of.
Of course Westwood Holdings Group 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.
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.
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