Investors who take an interest in Fathom Holdings Inc. (NASDAQ:FTHM) should definitely note that the Independent Chair of the Board, Scott Flanders, recently paid US$0.72 per share to buy US$500k worth of the stock. We reckon that's a good sign, especially since the purchase boosted their holding by 82%.

The Last 12 Months Of Insider Transactions At Fathom Holdings

In fact, the recent purchase by Scott Flanders was the biggest purchase of Fathom Holdings shares made by an insider individual in the last twelve months, according to our records. We do like to see buying, but this purchase was made at well below the current price of US$0.93. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Happily, we note that in the last year insiders paid US$1.6m for 1.34m shares. On the other hand they divested 101.72k shares, for US$288k. In the last twelve months there was more buying than selling by Fathom Holdings insiders. The average buy price was around US$1.19. These transactions suggest that insiders have considered the current price attractive. 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!

Fathom Holdings is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Insiders own 38% of Fathom Holdings shares, worth about US$8.0m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Fathom Holdings Tell Us?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Given that insiders also own a fair bit of Fathom Holdings we think they are probably pretty confident of a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Fathom Holdings. While conducting our analysis, we found that Fathom Holdings has 3 warning signs and it would be unwise to ignore them.

But note: Fathom 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.

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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.