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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 Liquefied Natural Gas Limited (ASX:LNG), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
The Last 12 Months Of Insider Transactions At Liquefied Natural Gas
In the last twelve months, the biggest single purchase by an insider was when MD, CEO & Director Gregory Vesey bought AU$84k worth of shares at a price of AU$0.56 per share. So it’s clear an insider wanted to buy, even at a higher price. Their view may have changed since then, but at least it shows they felt optimistic at the time. It’s not at all bad to see insiders buy shares at or above current prices.
Over the last year, we can see that insiders have bought 214.00k shares worth AU$123k. In total, Liquefied Natural Gas insiders bought more than they sold over the last year. They paid about AU$0.57 on average. These transactions suggest that insiders have considered the current price of AU$0.48 attractive. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insider Ownership of Liquefied Natural Gas
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. From our data, it seems that Liquefied Natural Gas insiders own 4.9% of the company, worth about AU$13m. But they may have an indirect interest through a corporate structure that we haven’t picked up on. Whilst better than nothing, we’re not overly impressed by these holdings.
What Might The Insider Transactions At Liquefied Natural Gas Tell Us?
It doesn’t really mean much that no insider has traded Liquefied Natural Gas shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Overall we don’t see anything to make us think Liquefied Natural Gas insiders are doubting the company, and they do own shares. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course Liquefied Natural Gas may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.