Investors who take an interest in Smith Douglas Homes Corp. (NYSE:SDHC) should definitely note that the Lead Independent Director, Jeffrey Jackson, recently paid US$29.77 per share to buy US$256k worth of the stock. We reckon that's a good sign, especially since the purchase boosted their holding by 120%.

Smith Douglas Homes Insider Transactions Over The Last Year

In fact, the recent purchase by Jeffrey Jackson was the biggest purchase of Smith Douglas Homes shares made by an insider individual in the last twelve months, according to our records. We do like to see buying, but this purchase was made at well below the current price of US$33.59. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

In the last twelve months Smith Douglas Homes insiders were buying shares, but not selling. Their average price was about US$26.55. We don't deny that it is nice to see insiders buying stock in the company. However, we do note that they were buying at significantly lower prices than today's share price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Smith Douglas Homes is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Our information indicates that Smith Douglas Homes insiders own about US$158k worth of shares. This level of insider ownership is notably low, and not very encouraging.

What Might The Insider Transactions At Smith Douglas Homes Tell Us?

The recent insider purchase is heartening. 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 Smith Douglas Homes 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. At Simply Wall St, we found 1 warning sign for Smith Douglas Homes that deserve your attention before buying any shares.

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.