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Insiders who purchased NVR, Inc. (NYSE:NVR) earlier this year lose an additional US$61k as the stock sinks to US$4,248

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Insiders who bought US$486k worth of NVR, Inc.'s (NYSE:NVR) stock at an average buy price of US$4,860 over the last year may be disappointed by the recent 4.5% decrease in the stock. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only US$425k.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for NVR

NVR Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by VP, Chief Accounting Officer & Controller Matthew Kelpy for US$486k worth of shares, at about US$4,860 per share. That means that even when the share price was higher than US$4,248 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Matthew Kelpy was the only individual insider to buy during the last year.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
insider-trading-volume

NVR is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does NVR Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. NVR insiders own 2.6% of the company, currently worth about US$369m based on the recent share price. 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 NVR Insiders?

The fact that there have been no NVR insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like NVR insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing NVR. Every company has risks, and we've spotted 2 warning signs for NVR (of which 1 is concerning!) you should know about.

Of course NVR may not be the best stock to buy. So you may wish to see this free collection of high quality 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, 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.

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