Co-Founder Gerald Harvey Just Bought 1.8% More Shares In Harvey Norman Holdings Limited (ASX:HVN)

Those following along with Harvey Norman Holdings Limited (ASX:HVN) will no doubt be intrigued by the recent purchase of shares by Gerald Harvey, Co-Founder of the company, who spent a stonking AU$29m on stock at an average price of AU$3.83. While that only increased their holding size by 1.8%, it is still a big swing by our standards.

Check out our latest analysis for Harvey Norman Holdings

The Last 12 Months Of Insider Transactions At Harvey Norman Holdings

Notably, that recent purchase by Gerald Harvey is the biggest insider purchase of Harvey Norman Holdings shares that we've seen in the last year. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$3.72). It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

While Harvey Norman Holdings insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Harvey Norman Holdings is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Harvey Norman Holdings Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Harvey Norman Holdings insiders own about AU$2.0b worth of shares (which is 42% 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.

What Might The Insider Transactions At Harvey Norman Holdings Tell Us?

The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest Harvey Norman Holdings insiders are well aligned, and quite possibly think the share price is too low. Looks promising! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Harvey Norman Holdings. Be aware that Harvey Norman Holdings is showing 2 warning signs in our investment analysis, and 1 of those is a bit unpleasant...

Of course Harvey Norman Holdings 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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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.