Insider Stock Buying Reaches AU$80.5m On Harvey Norman Holdings

Quite a few insiders have dramatically grown their holdings in Harvey Norman Holdings Limited (ASX:HVN) over the past 12 months. An insider's optimism about the company's prospects is a positive sign.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Harvey Norman Holdings

Harvey Norman Holdings Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Co-Founder Gerald Harvey for AU$29m worth of shares, at about AU$3.86 per share. That implies that an insider found the current price of AU$4.19 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Harvey Norman Holdings share holders is that insiders were buying at near the current price.

In the last twelve months Harvey Norman Holdings insiders were buying shares, but not selling. 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!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insiders At Harvey Norman Holdings Have Bought Stock Recently

We saw some Harvey Norman Holdings insider buying shares in the last three months. Independent Non-Executive Director Luisa Catanzaro bought AU$65k worth of shares in that time. We like it when there are only buyers, and no sellers. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.

Insider Ownership Of Harvey Norman Holdings

Many investors like to check how much of a company is owned by 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. Harvey Norman Holdings insiders own about AU$2.2b worth of shares (which is 43% of the company). 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 Does This Data Suggest About Harvey Norman Holdings Insiders?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. 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. That's what I like to see! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Harvey Norman Holdings. To that end, you should learn about the 3 warning signs we've spotted with Harvey Norman Holdings (including 1 which is concerning).

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.