stock has soared to a record high, and insiders have dramatically stepped up sales of the home builder’s shares. Lennar executives and directors have sold more than $41 million of stock thus far in 2020, compared with $5.7 million in all of last year.
Lennar’s (ticker: LEN) Class A and B shares have both soared more than 50% year to date through Friday’s close, more than twice the rise in the
S&P Homebuilders Select Industry Index
(SPHOME), and trouncing the 3.6% gain in the
S&P 500 index,
a broad measure of the market. Lennar wasn’t a slouch in 2019, either. Class A and B shares both rose about 43%. That was just ahead of the 40% rise in the S&P Homebuilders index and topped the 29% rise in the S&P 500.
Each Class A Lennar share carries one vote while Class B common shares, which trade under the LEN.b ticker, carry 10 votes each. Both classes trade publicly, and rose to records in the past week.
The home builder’s fiscal third quarter, reported in September, topped expectations. Demand for new homes in the U.S. is at its strongest in years. We offered suggestions earlier this year for investors contemplating which class of Lennar stock to purchase.
Lennar didn’t respond to a request to make its insiders available for comment on their stock sales.
One person accounts for most of the stock sales in 2020. Director Scott Stowell, who has sold 420,000 Cass A shares year to date for a total of $29.5 million, an average per-share price of $70.12, according to forms he filed with the Securities and Exchange Commission. Stowell is also the only seller of Class B shares in 2020, selling 8,603 of them for $528,600, an average per-share price of $61.45. A director since 2018, Stowell didn’t sell any stock last year. He joined the board when CalAtlantic Group, which he served as executive chairman, was acquired by Lennar. He now owns 23,095 Class A shares.
Controller David Collins is the second-biggest seller in 2020, having sold 70,000 Class A Lennar shares for a total of $4.6 million, an average price of $65 each. In all of 2019, he sold 15,000 Class A shares for $892,500, a per-share average of $59.50. Collins now owns 66,803 Class A shares and 3,538 Class B shares.
Director Jonathan Jaffe is another big seller of Lennar stock. Jaffe, a former Lennar chief operating officer, has sold 60,000 Class A shares this year for a total of $3.6 million, an average per-share price of $59.63. He sold shares through a trust that he controls. Last year, Jaffe accounted for most of the stock sales, selling 80,000 Class A shares through trusts for a total of $3.9 million, a per-share average of $49. He now owns 335,521 Class A shares and 166 Class B shares in a personal account, and 338,148 Class A shares and 46,466 Class B shares through trusts.
All of Jaffe’s sales were planned transactions, and were automatically executed when preset parameters, such as price and volume, are met. Such transactions are meant to remove any potential bias an insider may have from knowledge of material nonpublic information.
Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.