The Home Depot, Inc. (NYSE:HD) insiders sold US$4.3m worth of stock suggesting impending weakness.




  • In Business
  • 2022-10-02 11:00:53Z
  • By Simply Wall St.
 

In the last year, many The Home Depot, Inc. (NYSE:HD) 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, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Home Depot

Home Depot Insider Transactions Over The Last Year

The Executive Vice President of Customer Experience, Matthew Carey, made the biggest insider sale in the last 12 months. That single transaction was for US$4.0m worth of shares at a price of US$316 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$276. So it is hard to draw any strong conclusion from it.

Over the last year we saw more insider selling of Home Depot shares, than buying. 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!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Home Depot Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Home Depot. Specifically, insiders ditched US$4.3m 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 Home Depot

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 Home Depot insiders own 0.07% of the company, worth about US$204m. 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 Home Depot Insiders?

Insiders haven't bought Home Depot stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. But since Home Depot is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. 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 2 warning signs for Home Depot you should be aware of.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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