Don't Ignore The Insider Selling In Radian Group

Some Radian Group Inc. (NYSE:RDN) shareholders may be a little concerned to see that the President of Mortgage Insurance, Derek Brummer, recently sold a substantial US$1.0m worth of stock at a price of US$34.54 per share. That sale reduced their total holding by 16% which is hardly insignificant, but far from the worst we've seen.

Check out our latest analysis for Radian Group

Radian Group Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Brien McMahon, for US$2.1m worth of shares, at about US$31.10 per share. That means that even when the share price was below the current price of US$34.64, 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. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 33% of Brien McMahon's holding.

Radian Group insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Radian Group better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Does Radian Group Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 1.1% of Radian Group shares, worth about US$55m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Radian Group Tell Us?

An insider sold Radian Group shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. While insiders do own shares, they don't own a heap, and they have been selling. We're in no rush to buy! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we've found that Radian Group has 3 warning signs (1 is a bit unpleasant!) that deserve your attention before going any further with your analysis.

Of course Radian Group 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.