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Douglas Elliman Inc. (NYSE:DOUG) insiders who acquired shares over the previous 12 months, can probably afford to ignore the recent 19% decline in the stock price. Even after accounting for the recent loss, the US$2.60m worth of stock purchased by them is now worth US$2.91m or in other words, their investment continues to give good returns.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for Douglas Elliman
The Last 12 Months Of Insider Transactions At Douglas Elliman
Over the last year, we can see that the biggest insider purchase was by CEO & Chairman of the Board Michael Liebowitz for US$1.8m worth of shares, at about US$1.68 per share. That means that an insider was happy to buy shares at above the current price of US$1.65. It's very possible they regret the purchase, but it's more likely they are bullish about the company. 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.
In the last twelve months insiders purchased 1.76m shares for US$2.6m. But they sold 1.08m shares for US$1.8m. Overall, Douglas Elliman insiders were net buyers during the last year. The average buy price was around US$1.47. To my mind it is good that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
Insider Ownership
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Douglas Elliman insiders own about US$32m worth of shares. That equates to 21% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Douglas Elliman Insiders?
We can't make any useful conclusions about recent trading, since insider buying and selling has been balanced. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Douglas Elliman and we see no evidence to suggest they are worried about the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Douglas Elliman has 2 warning signs we think you should be aware of.