Yahoo Finance Should You Be Worried About Insider Transactions At Lennar Corporation (NYSE:LEN)?
We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Lennar Corporation (NYSE:LEN).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
Check out our latest analysis for Lennar
Lennar Insider Transactions Over The Last Year
VP, Secretary & General Counsel Mark Sustana made the biggest insider sale in the last 12 months. That single transaction was for US$8.7m worth of shares at a price of US$69.55 each. While the sale doesn’t make us feel confident, we do note it was conducted at a price well above the current share price, which is US$41.18. So it may not shed much light on insider confidence at current levels.
Over the last year, we note insiders sold 140.00k shares worth US$9.7m. All up, insiders sold more shares in Lennar than they bought, over the last year. The average sell price was around US$69.60. We are not joyful about insider selling. But the selling was at much higher prices than the current share price (US$41.18), so it probably doesn’t tell us a lot about the value on offer today. The chart below shows insider transactions over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership of Lennar
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. 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 Lennar insiders own 1.7% of the company, worth about US$226m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Lennar Tell Us?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. It’s great to see high levels of insider ownership, but looking back at the last year, we don’t gain confidence from the Lennar insiders selling. Of course, the future is what matters most. So if you are interested in Lennar, you should check out this free report on analyst forecasts for the company.
But note: Lennar 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
