Yahoo Finance Favourable Signals For Lynch Group Holdings: Numerous Insiders Acquired Stock
Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Lynch Group Holdings Limited (ASX:LGL), it sends a favourable message to the company's shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
View our latest analysis for Lynch Group Holdings
The Last 12 Months Of Insider Transactions At Lynch Group Holdings
Over the last year, we can see that the biggest insider purchase was by Independent Non-Executive Director Peter Clare for AU$249k worth of shares, at about AU$2.26 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$1.35). 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. In our view, the price an insider pays for shares is very important. 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 Lynch Group Holdings insiders bought shares during the last year, they didn't sell. The average buy price was around AU$1.86. These transactions suggest that insiders have considered the current price attractive. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Lynch Group Holdings is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders At Lynch Group Holdings Have Bought Stock Recently
We saw some Lynch Group Holdings insider buying shares in the last three months. Independent Non-Executive Director Peter Clare shelled out AU$48k for shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
Insider Ownership Of Lynch Group Holdings
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. From looking at our data, insiders own AU$2.9m worth of Lynch Group Holdings stock, about 1.8% of the company. However, it's possible that insiders might have an indirect interest through a more complex structure. We consider this fairly low insider ownership.
So What Does This Data Suggest About Lynch Group Holdings Insiders?
Our data shows a little insider buying, but no selling, in the last three months. Overall the buying isn't worth writing home about. But insiders have shown more of an appetite for the stock, over the last year. The transactions are fine but it'd be more encouraging if Lynch Group Holdings insiders bought more shares in the company. 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. While conducting our analysis, we found that Lynch Group Holdings has 1 warning sign and it would be unwise to ignore this.
But note: Lynch Group Holdings 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 of direct interests only, but not derivative transactions or indirect interests.
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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.
