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It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in LifeSpeak Inc.'s (TSE:LSPK) case, it's fantastic news for shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
Check out our latest analysis for LifeSpeak
The Last 12 Months Of Insider Transactions At LifeSpeak
Over the last year, we can see that the biggest insider purchase was by Non-Independent Executive Chairman Nolan Bederman for CA$500k worth of shares, at about CA$0.61 per share. That means that even when the share price was higher than CA$0.55 (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. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
LifeSpeak insiders may have bought shares in the last year, but they didn't sell any. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insider Ownership Of LifeSpeak
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. LifeSpeak insiders own about CA$8.1m worth of shares. That equates to 29% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About LifeSpeak Insiders?
The fact that there have been no LifeSpeak insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think LifeSpeak insiders are doubting the company, and they do own shares. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we found 4 warning signs for LifeSpeak that deserve your attention before buying any shares.