We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 before you buy or sell Lok'nStore Group Plc (LON:LOK), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.
Lok'nStore Group Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Non Executive Director Charles Peal bought UK£71k worth of shares at a price of UK£4.98 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of UK£6.75. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
Happily, we note that in the last year insiders paid UK£161k for 30.95k shares. On the other hand they divested 5.00k shares, for UK£28k. In the last twelve months there was more buying than selling by Lok'nStore Group insiders. The chart below shows insider transactions (by companies and individuals) 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!
Lok'nStore Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Lok'nStore Group Insiders Bought Stock Recently
Over the last three months, we've seen significantly more insider buying, than insider selling, at Lok'nStore Group. In fact, two insiders bought UK£80k worth of shares. But Non-Executive Director Simon Thomas sold shares worth UK£28k. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.
Does Lok'nStore Group Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Lok'nStore Group insiders own about UK£54m worth of shares. That equates to 28% 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.
What Might The Insider Transactions At Lok'nStore Group Tell Us?
It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. Insiders likely see value in Lok'nStore Group shares, given these transactions (along with notable insider ownership of the company). So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 2 warning signs for Lok'nStore Group you should be aware of.
But note: Lok'nStore Group 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, but not derivative transactions.
This article by Simply Wall St is general in nature. 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.
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