Multiple insiders secured a larger position in United Homes Group, Inc. (NASDAQ:UHG) shares over the last 12 months. This is reassuring as this suggests that insiders have increased optimism about the company's prospects.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for United Homes Group

The Last 12 Months Of Insider Transactions At United Homes Group

Over the last year, we can see that the biggest insider purchase was by Executive Chairman Michael Nieri for US$4.5m worth of shares, at about US$5.00 per share. That means that an insider was happy to buy shares at above the current price of US$3.81. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

Over the last year, we can see that insiders have bought 1.59m shares worth US$7.9m. But insiders sold 5.00k shares worth US$22k. Overall, United Homes Group insiders were net buyers during the last year. 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 plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

United Homes Group Insiders Bought Stock Recently

At United Homes Group,over the last quarter, we have observed quite a lot more insider buying than insider selling. In total, four insiders bought US$4.8m worth of shares in that time. On the other hand, Executive Vice President of Sales Robert Penny netted US$22k by selling. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.

Does United Homes Group Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. United Homes Group insiders own about US$94m worth of shares (which is 42% of the company). 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 United Homes Group Insider Transactions Indicate?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about United Homes Group. That's what I like to see! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing United Homes Group. Every company has risks, and we've spotted 2 warning signs for United Homes Group (of which 1 shouldn't be ignored!) you should know about.

Of course United Homes 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.