We'd be surprised if PulteGroup, Inc. (NYSE:PHM) shareholders haven't noticed that an insider, James Ossowski, recently sold US$399k worth of stock at US$39.95 per share. The eyebrow raising move amounted to a reduction of 17% in their holding.
PulteGroup Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the insider, Karen Pulte, sold US$3.5m worth of shares at a price of US$25.66 per share. That means that an insider was selling shares at slightly below the current price (US$40.41). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was 57% of Karen Pulte's stake. Notably Karen Pulte was also the biggest buyer, having purchased US$2.6m worth of shares.
All up, insiders sold more shares in PulteGroup than they bought, over the last year. The chart below shows insider transactions (by 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!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. PulteGroup insiders own 1.5% of the company, currently worth about US$161m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About PulteGroup Insiders?
An insider hasn't bought PulteGroup stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. But since PulteGroup is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
But note: PulteGroup 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, but not derivative transactions.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.