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Favorable turn of events for Limoneira Company (NASDAQ:LMNR) insiders who've lost US$78k to date on a US$1.4m purchase

Insiders who purchased US$1.4m worth of Limoneira Company (NASDAQ:LMNR) shares over the past year recouped some of their losses after price gained 14% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling US$78k.

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.

Check out our latest analysis for Limoneira

Limoneira Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Independent Director Jesus Loza for US$528k worth of shares, at about US$12.80 per share. That implies that an insider found the current price of US$13.36 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. In this case we're pleased to report that the insider bought shares at close to current prices. Jesus Loza was the only individual insider to buy shares in the last twelve months.

Jesus Loza purchased 95.64k shares over the year. The average price per share was US$14.17. You can see a visual depiction of insider transactions (by companies and 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!

insider-trading-volume
insider-trading-volume

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Limoneira Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Limoneira. Specifically, CFO & Treasurer Mark Palamountain ditched US$57k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership Of Limoneira

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Insiders own 6.6% of Limoneira shares, worth about US$16m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Limoneira Insiders?

An insider hasn't bought Limoneira stock in the last three months, but there was some selling. In contrast, they appear keener if you look at the last twelve months. And insiders do own shares. So the recent selling doesn't worry us too much. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To that end, you should learn about the 3 warning signs we've spotted with Limoneira (including 2 which make us uncomfortable).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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