Even though Linkhome Holdings Inc. (NASDAQ:LHAI) has fallen by 12% over the past week , insiders who sold US$2.4m worth of stock over the past year have had less luck. Given that the average selling price of US$1.50 is still lower than the current share price, insiders would probably have been better off keeping their shares.

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.

Linkhome Holdings Insider Transactions Over The Last Year

The CEO & Chairman of the Board, Zhen Qin, made the biggest insider sale in the last 12 months. That single transaction was for US$2.4m worth of shares at a price of US$1.50 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$0.90. So it is hard to draw any strong conclusion from it. Zhen Qin was the only individual insider to sell over the last year.

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!

I will like Linkhome Holdings better if I see some big insider buys.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Linkhome Holdings insiders own 52% of the company, worth about US$7.7m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Linkhome Holdings Tell Us?

The fact that there have been no Linkhome Holdings insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of Linkhome Holdings, we can't say the same about the selling of shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Linkhome Holdings. To help with this, we've discovered 2 warning signs (1 shouldn't be ignored!) that you ought to be aware of before buying any shares in Linkhome Holdings.

But note: Linkhome 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.

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.