Anyone interested in Hovnanian Enterprises, Inc. (NYSE:HOV) should probably be aware that the Lead Independent Director, Edward Kangas, recently divested US$289k worth of shares in the company, at an average price of US$145 each. However, the silver lining is that the sale only reduced their total holding by 8.4%, so we're hesitant to read anything much into it, on its own.
The Last 12 Months Of Insider Transactions At Hovnanian Enterprises
In the last twelve months, the biggest single sale by an insider was when the President, Ara Hovnanian, sold US$4.7m worth of shares at a price of US$101 per share. That means that an insider was selling shares at slightly below the current price (US$153). 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. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 12% of Ara Hovnanian's holding.
Insiders in Hovnanian Enterprises didn't buy any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like Hovnanian Enterprises better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
Insider Ownership
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. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Hovnanian Enterprises insiders own 21% of the company, worth about US$184m. 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 Hovnanian Enterprises Insiders?
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, Hovnanian Enterprises makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. You'd be interested to know, that we found 2 warning signs for Hovnanian Enterprises and we suggest you have a look.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 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.