Anyone interested in D.R. Horton, Inc. (NYSE:DHI) should probably be aware that the Independent Director, Barbara Allen, recently divested US$354k worth of shares in the company, at an average price of US$88.53 each. That sale was 41% of their holding, so it does make us raise an eyebrow.
D.R. Horton Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the VP & Corporate Controller, Aron Odom, for US$451k worth of shares, at about US$81.96 per share. That means that even when the share price was below the current price of US$88.18, an insider wanted to cash in some shares. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was 54% of Aron Odom's holding.
In the last year D.R. Horton insiders didn't buy any company stock. 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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company 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 D.R. Horton insiders own 9.7% of the company, worth about US$3.0b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The D.R. Horton Insider Transactions Indicate?
Insiders sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. On the plus side, D.R. Horton makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 3 warning signs for D.R. Horton (2 shouldn't be ignored!) that we believe deserve your full attention.
Of course D.R. Horton may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.
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