Gerry Harvey Engages In Insider Trading
Gerry Harvey has been shopping during COVID lockdowns buying up nearly a million dollars’ worth of stock in his own Harvey Norman operation.
His purchase is the biggest purchase of Harvey Norman Holdings shares made by an insider individual in the last twelve months, according to records.
The Chairman of the big retailer who appears to be confident that the retailer is set to have a big last quarter as consumers are expected to flock back to shopping in stores when lockdowns are lifted, purchased a whopping AU$998k worth of stock, at a price of AU$4.99. While that only increased his Harvey Norman holding by 0.05%, it is still a big swing according to analysts.
They claim that the purchase by an insider at a price above the current price of AU$4.94 is seen as a good thing. Though one analyst did point out that Gerry Harvey has in the past purchased his shares in a business he owns only to see the stock go down.
Motley Fool claimed that it is their view, that the price an insider pays for shares is very important and that as a general rule, they feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
Research shows that while Harvey Norman Holdings insiders bought shares during the last year, they didn’t sell.
Harvey Norman Holdings insiders own 41% of the company, currently worth about AU$2.5b 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 claims analysts.
When combined with notable insider ownership, these factors suggest Harvey Norman Holdings insiders are well aligned, and quite possibly think the share price is too low they said.