The VP & Corporate Controller of D.R. Horton, Inc. (NYSE:DHI), Aron Odom, Just Sold 43% Of Their Holding

Anyone interested in D.R. Horton, Inc. (NYSE:DHI) should probably be aware that the VP & Corporate Controller, Aron Odom, recently divested US$109k worth of shares in the company, at an average price of US$83.64 each. The eyebrow raising move amounted to a reduction of 43% in their holding.

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D.R. Horton Insider Transactions Over The Last Year

Notably, that recent sale by VP & Corporate Controller Aron Odom was not the only time they sold D.R. Horton shares this year. They previously made an even bigger sale of -US$389k worth of shares at a price of US$77.72 per share. So it’s clear an insider wanted to take some cash off the table, even below the current price of US$81.39. 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. However, while insider selling is sometimes discouraging, it’s only a weak signal. It is worth noting that this sale was 62% of Aron Odom’s holding.

Insiders in D.R. Horton didn’t buy any shares in the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Insider Ownership Of D.R. Horton

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. D.R. Horton insiders own 0.6% of the company, currently worth about US$173m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The D.R. Horton Insider Transactions Indicate?

Insiders haven’t bought D.R. Horton stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn’t show any insider buying. But it is good to see that D.R. Horton is growing earnings. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn’t make us feel confident about the company. 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. For example, D.R. Horton has 3 warning signs (and 2 which make us uncomfortable) we think you should know about.

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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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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.