Alarm.com Holdings, Inc. (NASDAQ:ALRM) shareholders might have a reason to worry after multiple insiders sold their shares over the last year. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Alarm.com Holdings

The Last 12 Months Of Insider Transactions At Alarm.com Holdings

In the last twelve months, the biggest single sale by an insider was when the CFO & Principal Accounting Officer, Steve Valenzuela, sold US$446k worth of shares at a price of US$58.48 per share. That means that an insider was selling shares at around the current price of US$58.09. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

In the last year Alarm.com Holdings insiders didn't buy any company stock. 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!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Does Alarm.com Holdings 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. Alarm.com Holdings insiders own 4.8% of the company, currently worth about US$141m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Alarm.com Holdings Insider Transactions Indicate?

The fact that there have been no Alarm.com Holdings insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of Alarm.com Holdings, we can't say the same about the selling of shares. 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 example - Alarm.com Holdings has 1 warning sign we think you should be aware of.

But note: Alarm.com Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.