We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So we’ll take a look at whether insiders have been buying or selling shares in Walker & Dunlop, Inc. (NYSE:WD).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
The Last 12 Months Of Insider Transactions At Walker & Dunlop
In the last twelve months, the biggest single sale by an insider was when Executive VP & CFO Stephen Theobald sold US$1.1m worth of shares at a price of US$57.08 per share. So what is clear is that an insider saw fit to sell at around the current price of US$50.40. They might be selling for a variety of reasons, but it’s hard to argue this is a bullish sign. We usually pause to reflect on the potential that a stock has a high valuation, if insiders have been selling at around the current price.
Happily, we note that in the last year insiders paid US$119k for 2.41k shares. On the other hand they divested 50.93k shares, for US$2.8m. All up, insiders sold more shares in Walker & Dunlop than they bought, over the last year. They sold for an average price of about US$54.77. It’s not particularly great to see insiders were selling shares at below recent prices. But we wouldn’t put too much weight on the insider selling. You can see the insider transactions (by 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!
I will like Walker & Dunlop better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Walker & Dunlop Insiders Are Selling The Stock
There was substantially more insider selling, than buying, of Walker & Dunlop shares over the last three months. In total, Executive VP & Chief Credit Officer Richard Warner sold US$580k worth of shares in that time. On the flip side, Lead Independent Director Alan Bowers spent US$9.6k on purchasing shares. Because the selling vastly outweighs the buying, we’d say this is a somewhat bearish sign.
Does Walker & Dunlop 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It’s great to see that Walker & Dunlop insiders own 7.8% of the company, worth about US$119m. 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 Walker & Dunlop Insiders?
Unfortunately, there has been more insider selling of Walker & Dunlop stock, than buying, in the last three months. Zooming out, the longer term picture doesn’t give us much comfort. It is good to see high insider ownership, but the insider selling leaves us cautious. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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