Lennar Independent Director Jeffrey Sonnenfeld Sells 42% Of Holding

We wouldn't blame Lennar Corporation (NYSE:LEN) shareholders if they were a little worried about the fact that Jeffrey Sonnenfeld, the Independent Director recently netted about US$3.1m selling shares at an average price of US$175. That's a big disposal, and it decreased their holding size by 42%, which is notable but not too bad.

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Lennar Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the VP, General Counsel & Secretary, Mark Sustana, sold US$5.5m worth of shares at a price of US$146 per share. That means that even when the share price was below the current price of US$170, an insider wanted to cash in some shares. 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. 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 67% of Mark Sustana's stake.

All up, insiders sold more shares in Lennar than they bought, over the last year. 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!

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Insider Ownership Of Lennar

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Lennar insiders own 11% of the company, worth about US$5.0b. 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 Lennar Insider Transactions Indicate?

An insider sold stock recently, but they haven't been buying. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But since Lennar is profitable and growing, we're not too worried by this. 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. At Simply Wall St, we found 1 warning sign for Lennar that deserve your attention before buying any shares.

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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.