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Great news for Lument Finance Trust, Inc. (NYSE:LFT): Insiders acquired stock in large numbers last year

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Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Lument Finance Trust, Inc. (NYSE:LFT), that sends out a positive message to the company's shareholders.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Lument Finance Trust

Lument Finance Trust Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Independent Director James Hunt bought US$71k worth of shares at a price of US$2.88 per share. That means that even when the share price was higher than US$2.38 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we 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.

While Lument Finance Trust insiders bought shares during the last year, they didn't sell. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
insider-trading-volume

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Lument Finance Trust Insiders Bought Stock Recently

It's good to see that Lument Finance Trust insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought US$91k worth of shares. This makes one think the business has some good points.

Insider Ownership of Lument Finance Trust

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data suggests Lument Finance Trust insiders own 2.7% of the company, worth about US$3.3m. But they may have an indirect interest through a corporate structure that we haven't picked up on. We consider this fairly low insider ownership.

So What Do The Lument Finance Trust Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Lument Finance Trust insiders are expecting a bright future. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 5 warning signs for Lument Finance Trust you should be aware of, and 3 of them make us uncomfortable.

But note: Lument Finance Trust may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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