The Home Depot, Inc. (NYSE:HD) insiders sold US$9.6m worth of stock suggesting impending weakness.

Many The Home Depot, Inc. (NYSE:HD) insiders ditched their stock over the past year, which may be of interest to the company’s shareholders. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View 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 held at a price well above the current share price, which was US$287. So it may not shed much light on insider confidence at current levels.

In the last twelve months insiders purchased 3.08k shares for US$932k. On the other hand they divested 30.41k shares, for US$9.6m. In total, Home Depot insiders sold more than they bought 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 want to know exactly who sold, for how much, and when, simply click on the graph below!

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insider-trading-volume

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Home Depot Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Home Depot insiders own about US$206m worth of shares (which is 0.07% of the company). 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?

The fact that there have been no Home Depot insider transactions recently certainly doesn’t bother us. While we feel good about high insider ownership of Home Depot, we can’t say the same about the selling of shares. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Home Depot. While conducting our analysis, we found that Home Depot has 1 warning sign and it would be unwise to ignore this.

But note: Home Depot 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, 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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