Some KB Home (NYSE:KBH) shareholders may be a little concerned to see that the Executive Vice President of Real Estate & Business Development, Albert Praw, recently sold a substantial US$1.5m worth of stock at a price of US$79.18 per share. That's a big disposal, and it decreased their holding size by 15%, which is notable but not too bad.

The Last 12 Months Of Insider Transactions At KB Home

Over the last year, we can see that the biggest insider sale was by the Executive VP & CFO, Jeff Kaminski, for US$4.6m worth of shares, at about US$61.27 per share. That means that even when the share price was below the current price of US$78.53, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent 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. It is worth noting that this sale was 67% of Jeff Kaminski's holding.

KB Home 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. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like KB Home 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 KB Home 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. KB Home insiders own 3.7% of the company, currently worth about US$214m 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 KB Home Insider Transactions Indicate?

An insider hasn't bought KB Home stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. On the plus side, KB Home makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. While it's good to be aware of 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. In terms of investment risks, we've identified 1 warning sign with KB Home and understanding it should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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