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Insiders Buying Up Shares In Harvey Norman Despite Analysts Concerns

Did Harvey Norman have a good Boxing Day with insiders scooping up stock at the big retailer during the past few months or is it because the stock has been on the rise during the past six months since the Company did a share buyback.

The biggest insider purchase was Chairman Gerry Harvey who scooped up $29m worth of his own Companies shares, at about AU$3.86 per share. Today the stock is trading at $4.13 which is not much of a gain.

There is one thing to go with and that is the fact that Gerry Harvey is optimistic or is he trying to give the share price a push along in an effort to attract investors.

The good news for Harvey Norman Holdings shareholders is that insiders were buying at near the current price claim analysts at Simply Wall Street.

In the last twelve months Harvey Norman Holdings insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year.

One person buying was Independent Non-Executive Director Luisa Catanzaro who bought AU$65k worth of shares recently.

The bad news is that there was not a big enough amount invested in the last three months to put much weight on it, as a single factor.

Currently Harvey Norman Holdings insiders own about $2.2b worth of shares (which is 43% of the company) which is excessively high. This is something Gerry Harvey likes as it allows him to tell the Australian Shareholders Association to “Piss off” when they ask tough questions at his AGM.

On the downside analysts claim that there could be problems ahead with earnings forecast to decline by an average of 1.5% per year for the next 3 years

Profit margins (19.4%) are lower than last year (28.9%), and the business has an “Unstable dividend track record”.

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