Heritage Insurance Holdings, Inc. (NYSE:HRTG) insiders’ US$898k purchase saw a boost of US$147k after market cap rose US$8.1m

Heritage Insurance Holdings, Inc. (NYSE:HRTG) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 24% resulting in a US$8.1m addition to the company’s market value. As a result, the stock they originally bought for US$898k is now worth US$1.0m.

Although we don’t think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out the opportunities and risks within the US Insurance industry.

Heritage Insurance Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Raymond Hyer bought US$394k worth of shares at a price of US$1.41 per share. We do like to see buying, but this purchase was made at well below the current price of US$1.68. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn’t tell us much about what they think of current prices.

In the last twelve months Heritage Insurance Holdings insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Heritage Insurance Holdings Insiders Bought Stock Recently

Over the last three months, we’ve seen significant insider buying at Heritage Insurance Holdings. Overall, four insiders shelled out US$809k for shares in the company — and none sold. This makes one think the business has some good points.

Insider Ownership Of Heritage Insurance Holdings

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it’s a good sign if insiders own a significant number of shares in the company. Heritage Insurance Holdings insiders own about US$11m worth of shares. That equates to 25% of the company. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Heritage Insurance Holdings Tell Us?

It’s certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. However, we note that the company didn’t make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest Heritage Insurance Holdings insiders are well aligned, and that they may think the share price is too low. While we like knowing what’s going on with the insider’s ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. While conducting our analysis, we found that Heritage Insurance Holdings has 2 warning signs and it would be unwise to ignore these.

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, but not derivative transactions.

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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.