Amy Banse, a director at Lennar Corp (LEN) recently bought 920 shares. The buy increased her position by 10 percent, and came to a total cost just over $100,000.
This follows up on two other buys she made in August, for about $201,000, and another buy in July, also in the $100,000 range. Otherwise, company insiders were sellers of shares last year, including both the company’s CFO and several vice presidents.
Overall, company insiders own 2.4 percent of shares.
The homebuilder is up 42 percent over the past year. While home sales have slowed, the drop in existing home sales has led buyers to purchase new homes such as those built by Lennar.
And even with mortgage rates nearing 8 percent, Lennar looks priced inexpensively at 8 times forward earnings and just under 1 times its price to sales.
Action to take: Lennar will continue to sell new homes, and the market could get a boost when interest rates start to trend lower, likely in the next 6-12 months. That could help shares continue their recent rally.
At present, Lennar yields about 1.4 percent. The payout ratio is low, so even if home sales drop over the short term, Lennar can likely continue to maintain that payment.
For traders, shares have been trending lower in recent months, but are likely to stage a year-end rally. The January 2024 $120 calls, last going for about $3.85, could see mid-to-high double-digit returns in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.