In the last year, many Dream Finders Homes, Inc. (NYSE:DFH) insiders sold a substantial stake in the company which may have sparked shareholders' attention. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, if numerous insiders are selling, shareholders should investigate more.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Dream Finders Homes

Dream Finders Homes Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, J. Moran, sold US$2.0m worth of shares at a price of US$24.68 per share. That means that even when the share price was below the current price of US$28.46, 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 5.8% of J. Moran's holding.

Dream Finders Homes insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

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Dream Finders Homes Insiders Are Selling The Stock

The last three months saw significant insider selling at Dream Finders Homes. In total, Founder Patrick Zalupski dumped US$904k 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.

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. Dream Finders Homes insiders own 76% of the company, currently worth about US$2.0b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Dream Finders Homes Insider Transactions Indicate?

An insider sold Dream Finders Homes shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. But it is good to see that Dream Finders Homes is growing earnings. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Dream Finders Homes. In terms of investment risks, we've identified 1 warning sign with Dream Finders Homes and understanding it should be part of your investment process.

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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.