Insiders were net buyers of Smith Douglas Homes Corp.'s (NYSE:SDHC ) stock during the past year. That is, insiders bought more stock than they sold.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Smith Douglas Homes

Smith Douglas Homes Insider Transactions Over The Last Year

The VP, General Counsel & Secretary Brett Steele made the biggest insider purchase in the last 12 months. That single transaction was for US$105k worth of shares at a price of US$21.00 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$37.50. 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.

The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. From what we can see in our data, insiders own only about US$32k worth of Smith Douglas Homes shares. It's always possible we are missing something but from our data, it looks like insider ownership is minimal.

So What Do The Smith Douglas Homes Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Smith Douglas Homes shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Smith Douglas Homes stock. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To that end, you should learn about the 2 warning signs we've spotted with Smith Douglas Homes (including 1 which doesn't sit too well with us).

But note: Smith Douglas Homes 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.