Yahoo Finance Insider Buying: The Harvey Norman Holdings Limited (ASX:HVN) Co-Founder Just Bought AU$2.0m Worth Of Shares
Those following along with Harvey Norman Holdings Limited (ASX:HVN) will no doubt be intrigued by the recent purchase of shares by Gerald Harvey, Co-Founder of the company, who spent a stonking AU$2.0m on stock at an average price of AU$4.94. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 0.1%.
See our latest analysis for Harvey Norman Holdings
The Last 12 Months Of Insider Transactions At Harvey Norman Holdings
In fact, the recent purchase by Gerald Harvey was the biggest purchase of Harvey Norman Holdings shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$4.88). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
While Harvey Norman Holdings insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Does Harvey Norman Holdings 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Harvey Norman Holdings insiders own about AU$2.5b worth of shares (which is 41% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Harvey Norman Holdings Insiders?
The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Harvey Norman Holdings. One for the watchlist, at least! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Harvey Norman Holdings is showing 2 warning signs in our investment analysis, and 1 of those doesn't sit too well with us...
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.
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.
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