On June 5, 2023, Sr. EVP, General Counsel Edward Hoffman sold 30,000 shares of Radian Group Inc (RDN, Financial). This insider sell comes after a year of trading activity for Hoffman, who has sold a total of 40,000 shares and purchased 0 shares in the past year.
Edward Hoffman serves as the Senior Executive Vice President and General Counsel for Radian Group Inc. Radian Group Inc is a leading provider of mortgage insurance, risk management products, and real estate services for financial institutions. The company's primary business segments include Mortgage Insurance and Services, which offer credit-related insurance coverage and other risk management solutions to mortgage lending institutions.
Let's take a closer look at the insider trading trends and the relationship between insider transactions and stock price for Radian Group Inc.
Insider Trends
Over the past year, there have been 0 insider buys and 11 insider sells for Radian Group Inc. This indicates a trend of insider selling, which could be a signal that insiders believe the stock is overvalued or that they are taking profits off the table.
As seen in the insider trend image above, the number of insider sells has been relatively consistent over the past year. This could be an indication that insiders are taking advantage of the stock's current valuation to sell their shares.
Valuation
On the day of Edward Hoffman's recent sell, shares of Radian Group Inc were trading at $25.98 apiece, giving the stock a market cap of $4.15 billion.
The price-earnings ratio for Radian Group Inc is 6.12, which is lower than the industry median of 13.21 and lower than the company's historical median price-earnings ratio. This suggests that the stock may be undervalued compared to its peers and its historical valuation.
According to the GF Value image above, Radian Group Inc has a price-to-GF-Value ratio of 1.17, with a GuruFocus Value of $22.28 and a current price of $25.98. This indicates that the stock is modestly overvalued based on its GF Value.
The GF Value is an intrinsic value estimate developed by GuruFocus, which is calculated based on the following three factors:
- Historical multiples (price-earnings ratio, price-sales ratio, price-book ratio, and price-to-free cash flow) that the stock has traded at.
- A GuruFocus adjustment factor based on the company's past returns and growth.
- Future estimates of business performance from Morningstar analysts.
In conclusion, the recent insider sell by Edward Hoffman could be a signal that insiders believe Radian Group Inc's stock is modestly overvalued. However, the stock's price-earnings ratio suggests that it may be undervalued compared to its industry peers and historical valuation. Investors should keep an eye on the company's financial performance and insider trading activity to make informed decisions about their investments in Radian Group Inc.
