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 Lifestyle Communities Limited (ASX:LIC), it sends a favourable message to the company's shareholders.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for Lifestyle Communities
Lifestyle Communities Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Non Executive Director David Blight bought AU$96k worth of shares at a price of AU$16.04 per share. That means that an insider was happy to buy shares at around the current price of AU$16.63. 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 do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Lifestyle Communities insiders decided to buy shares at close to current prices.
While Lifestyle Communities insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Lifestyle Communities is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Does Lifestyle Communities Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It appears that Lifestyle Communities insiders own 6.9% of the company, worth about AU$119m. 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 Do The Lifestyle Communities Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Lifestyle Communities shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. With high insider ownership and encouraging transactions, it seems like Lifestyle Communities insiders think the business has merit. 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've found that Lifestyle Communities has 3 warning signs (1 is significant!) that deserve your attention before going any further with your analysis.