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Have D.R. Horton, Inc. (NYSE:DHI) Insiders Been Selling Their Stock?


We’d be surprised if D.R. Horton, Inc. (NYSE:DHI) shareholders haven’t noticed that the Independent Director, Michael Buchanan, recently sold US$173k worth of stock at US$86.48 per share. The eyebrow raising move amounted to a reduction of 14% in their holding.

Our analysis indicates that DHI is potentially undervalued!

The Last 12 Months Of Insider Transactions At D.R. Horton

In the last twelve months, the biggest single sale by an insider was when the VP & Corporate Controller, Aron Odom, sold US$389k worth of shares at a price of US$77.72 per share. That means that an insider was selling shares at slightly below the current price (US$83.91). 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 62% of Aron Odom’s stake.

D.R. Horton insiders didn’t buy any shares over the last year. 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!

NYSE:DHI Insider Trading Volume December 7th 2022

I will like D.R. Horton better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership Of D.R. Horton

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. We usually like to see fairly high levels of insider ownership. It’s great to see that D.R. Horton insiders own 0.6% of the company, worth about US$180m. 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 Do The D.R. Horton Insider Transactions Indicate?

Insiders sold stock recently, but they haven’t been buying. And even if we look at the last year, we didn’t see any purchases. But it is good to see that D.R. Horton is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. Case in point: We’ve spotted 3 warning signs for D.R. Horton you should be aware of, and 2 of them don’t sit too well with us.

Of course D.R. Horton 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, but not derivative transactions.

Valuation is complex, but we’re helping make it simple.

Find out whether D.R. Horton is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

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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