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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, logic dictates you should pay some attention to whether insiders are buying or selling shares.
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 Non-Executive Chairman Patrick Elliott for AU$235k worth of shares, at about AU$1.73 per share. That means that an insider was happy to buy shares at around the current price of AU$1.83. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. In this case we're pleased to report that the insider purchases were made at close to current prices.
In the last twelve months Lynch Group Holdings insiders were buying shares, but not selling. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Based on our data, Lynch Group Holdings insiders have about 1.8% of the stock, worth approximately AU$3.9m. But they may have an indirect interest through a corporate structure that we haven't picked up on. I generally like to see higher levels of ownership.
What Might The Insider Transactions At Lynch Group Holdings Tell Us?
There haven't been any insider transactions in the last three months -- that doesn't mean much. 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. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Lynch Group Holdings. In terms of investment risks, we've identified 1 warning sign with Lynch Group Holdings and understanding this should be part of your investment process.