Stock Analysis

PennyMac Financial Services Insiders Sold US$25m Of Shares Suggesting Hesitancy

NYSE:PFSI
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In the last year, many PennyMac Financial Services, Inc. (NYSE:PFSI) insiders sold a substantial stake in the company which may have sparked shareholders' attention. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, if numerous insiders are selling, shareholders should investigate more.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for PennyMac Financial Services

PennyMac Financial Services Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Independent Director, Joseph Mazzella, for US$4.1m worth of shares, at about US$58.67 per share. That means that even when the share price was below the current price of US$67.36, 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 just 18% of Joseph Mazzella's stake.

In the last year PennyMac Financial Services insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
NYSE:PFSI Insider Trading Volume October 10th 2023

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).

Insiders At PennyMac Financial Services Have Sold Stock Recently

The last three months saw significant insider selling at PennyMac Financial Services. In total, insiders dumped US$4.9m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership Of PennyMac Financial Services

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. PennyMac Financial Services insiders own about US$327m worth of shares (which is 9.7% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About PennyMac Financial Services Insiders?

Insiders sold PennyMac Financial Services shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 3 warning signs for PennyMac Financial Services you should be aware of, and 1 of them is concerning.

Of course PennyMac Financial Services 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 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.