We wouldn't blame PennyMac Financial Services, Inc. (NYSE:PFSI) shareholders if they were a little worried about the fact that Joseph Mazzella, the Independent Director recently netted about US$1.1m selling shares at an average price of US$97.92. However, that sale only accounted for 4.1% of their holding, so arguably it doesn't say much about their conviction.
The Last 12 Months Of Insider Transactions At PennyMac Financial Services
The President, Douglas Jones, made the biggest insider sale in the last 12 months. That single transaction was for US$2.8m worth of shares at a price of US$80.38 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$97.75. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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 just 5.6% of Douglas Jones's stake.
Insiders in PennyMac Financial Services 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).
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. I reckon it's a good sign if insiders own a significant number of shares in the company. PennyMac Financial Services insiders own about US$357m worth of shares (which is 7.1% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About PennyMac Financial Services Insiders?
Insiders haven't bought PennyMac Financial Services stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 5 warning signs for PennyMac Financial Services you should be aware of, and 1 of these makes us a bit uncomfortable.
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.