Stock Analysis

Independent Director Michael Warren Just Sold A Bunch Of Shares In Walker & Dunlop, Inc. (NYSE:WD)

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NYSE:WD
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Anyone interested in Walker & Dunlop, Inc. (NYSE:WD) should probably be aware that the Independent Director, Michael Warren, recently divested US$203k worth of shares in the company, at an average price of US$101 each. In particular, we note that the sale equated to a 79% reduction in their position size, which doesn't exactly instill confidence.

Check out our latest analysis for Walker & Dunlop

Walker & Dunlop Insider Transactions Over The Last Year

The Chairman & CEO, William Walker, made the biggest insider sale in the last 12 months. That single transaction was for US$4.3m worth of shares at a price of US$69.61 each. That means that an insider was selling shares at slightly below the current price (US$102). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 4.7% of William Walker's holding.

Happily, we note that in the last year insiders paid US$1.0m for 20.48k shares. But insiders sold 89.54k shares worth US$6.4m. All up, insiders sold more shares in Walker & Dunlop than they bought, over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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NYSE:WD Insider Trading Volume February 22nd 2021

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insider Ownership of Walker & Dunlop

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Walker & Dunlop insiders own about US$253m worth of shares (which is 7.9% 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 Do The Walker & Dunlop Insider Transactions Indicate?

An insider sold stock recently, but they haven't been buying. Zooming out, the longer term picture doesn't give us much comfort. But it is good to see that Walker & Dunlop is growing earnings. 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. Every company has risks, and we've spotted 2 warning signs for Walker & Dunlop you should know about.

Of course Walker & Dunlop 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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