Insider Activity Report: Lennar (LEN)

Amy Banse, a director at Lennar (LEN), recently bought 820 shares. The buy increased her stake by 11 percent, and came to a total cost of $100,909.

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  • The director was the last insider buyer, with a 790 share pickup in July and a 165 share buy in June. Overall, that adds another $110,000 in purchases to the recent buy. Insiders have otherwise been slight sellers of shares over the past two years.

    Overall, insiders own about 2.4 percent of the homebuilder’s shares.

    Lennar has been a strong performer, with the stock up 43 percent over the past year. Part of the move has been driven by a lack of used home supply amid rising mortgage rates. That’s allowed homebuilders to cover the demand for new homes.

    Chances are this trend will continue, as interest rates continue to rise and will likely stay elevated for some time.

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  • Action to take: Even with the big rally, Lennar is inexpensive at about 10 times forward earnings and trading at 1x its price-to-sales ratio. Buyers at today’s prices can also get a 1.2 percent dividend.

    For traders, shares are likely to trend higher, and look slightly oversold in the short-term. The November $125 calls, last going for about $5.75, could see mid-double-digit returns in the months ahead.


    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.


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