Some NVR, Inc. (NYSE:NVR) shareholders may be a little concerned to see that the Senior VP & COO, Paul Praylo, recently sold a substantial US$572k worth of stock at a price of US$4,502 per share. That sale reduced their total holding by 30% which is hardly insignificant, but far from the worst we've seen.
NVR Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Independent Director, Alfred Festa, sold US$2.1m worth of shares at a price of US$4,129 per share. That means that even when the share price was below the current price of US$4,500, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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 61% of Alfred Festa's stake.
Over the last year, we can see that insiders have bought 152.00 shares worth US$502k. But they sold 627.00 shares for US$2.6m. Over the last year we saw more insider selling of NVR shares, than buying. The sellers received a price of around US$4,204, on average. It's not particularly great to see insiders were selling shares at below recent prices. Since insiders sell for many reasons, we wouldn't put too much weight on it. 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!
I will like NVR better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
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. NVR insiders own 2.6% of the company, currently worth about US$430m based on the recent share price. 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 NVR Tell Us?
Insiders sold NVR shares recently, but they didn't buy any. Zooming out, the longer term picture doesn't give us much comfort. But it is good to see that NVR is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing NVR. Every company has risks, and we've spotted 2 warning signs for NVR you should know about.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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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