We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Lithium Americas Corp. (TSE:LAC).
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. 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.'
Lithium Americas Insider Transactions Over The Last Year
Executive Vice Chairman John Kanellitsas made the biggest insider purchase in the last 12 months. That single transaction was for CA$440k worth of shares at a price of CA$4.76 each. That implies that an insider found the current price of CA$5.34 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. 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.
Over the last year, we can see that insiders have bought 468k shares worth CA$2.3m. On the other hand they divested 12500 shares, for CA$86k. Overall, Lithium Americas insiders were net buyers last year. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Lithium Americas Insiders Bought Stock Recently
Over the last three months, we've seen a bit of insider buying at Lithium Americas. President & COO Jonathan Evans shelled out US$58k for shares in that time. We like it when there are only buyers, and no sellers. However, in this case the amount invested recently is quite small.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 5.5% of Lithium Americas shares, worth about CA$26m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Lithium Americas Tell Us?
It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss last year, which makes us a little cautious. Insiders likely see value in Lithium Americas shares, given these transactions (along with notable insider ownership of the company). Of course, the future is what matters most. So if you are interested in Lithium Americas, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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