Some PennyMac Financial Services, Inc. (NYSE:PFSI) shareholders may be a little concerned to see that the President, Douglas Jones, recently sold a substantial US$2.7m worth of stock at a price of US$91.49 per share. However, that sale only accounted for 5.7% of their holding, so arguably it doesn't say much about their conviction.
The Last 12 Months Of Insider Transactions At PennyMac Financial Services
Notably, that recent sale by President Douglas Jones was not the only time they sold PennyMac Financial Services shares this year. They previously made an even bigger sale of -US$2.8m worth of shares at a price of US$80.38 per share. That means that an insider was selling shares at slightly below the current price (US$91.29). 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 5.6%of Douglas Jones's holding.
In the last year PennyMac Financial Services insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.
Insider Ownership Of PennyMac Financial Services
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that PennyMac Financial Services insiders own 7.3% of the company, worth about US$338m. 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 PennyMac Financial Services Insiders?
Insiders haven't bought PennyMac Financial Services 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. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing PennyMac Financial Services. Every company has risks, and we've spotted 4 warning signs for PennyMac Financial Services (of which 1 doesn't sit too well with us!) you should know about.
But note: PennyMac Financial Services may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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 of direct interests only, but not derivative transactions or indirect interests.
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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.