Over the past year, many Forestar Group Inc. (NYSE:FOR) insiders sold a significant stake in the company which may have piqued investors' interest. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Forestar Group Insider Transactions Over The Last Year

The Consultant, Daniel Bartok, made the biggest insider sale in the last 12 months. That single transaction was for US$617k worth of shares at a price of US$31.12 each. That means that even when the share price was slightly below the current price of US$31.41, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 30% of Daniel Bartok's holding.

All up, insiders sold more shares in Forestar Group 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 Forestar Group 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.

Forestar Group Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Forestar Group shares. In total, insiders dumped US$160k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Does Forestar Group Boast High 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. From our data, it seems that Forestar Group insiders own 0.4% of the company, worth about US$7.1m. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Do The Forestar Group Insider Transactions Indicate?

Insiders sold stock recently, but they haven't been buying. Zooming out, the longer term picture doesn't give us much comfort. On the plus side, Forestar Group makes money, and is growing profits. When you consider that most companies have higher levels of insider ownership, we're a little wary. We'd certainly practice some caution before buying! Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Forestar Group.

Of course Forestar 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 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.