We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So we’ll take a look at whether insiders have been buying or selling shares in LSL Property Services plc (LON:LSL).
What Is Insider Selling?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
LSL Property Services Insider Transactions Over The Last Year
Non Executive Chairman Simon Embley made the biggest insider purchase in the last 12 months. That single transaction was for UK£1.7m worth of shares at a price of UK£2.55 each. So it’s clear an insider wanted to buy, even at a higher price. Their view may have changed since then, but at least it shows they felt optimistic at the time. We generally consider it a positive if insiders have been buying on market, even above the current price. Simon Embley was the only individual insider to buy over the year.
The chart below shows insider transactions over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like LSL Property Services better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Does LSL Property Services Boast High Insider Ownership?
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. We usually like to see fairly high levels of insider ownership. It’s great to see that LSL Property Services insiders own 10% of the company, worth about UK£25m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The LSL Property Services Insider Transactions Indicate?
It doesn’t really mean much that no insider has traded LSL Property Services shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in LSL Property Services and their transactions don’t cause us concern. Of course, the future is what matters most. So if you are interested in LSL Property Services, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.