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Insider Buying: The The L.S. Starrett Company (NYSE:SCX) Lead Independent Director Just Bought 45% More Shares

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Simply Wall St
·3 min read
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Even if it's not a huge purchase, we think it was good to see that Thomas Riordan, the Lead Independent Director of The L.S. Starrett Company (NYSE:SCX) recently shelled out US$76k to buy stock, at US$4.19 per share. While we're hesitant to get too excited about a purchase of that size, we do note it increased their holding by a solid 45%.

Check out our latest analysis for L.S. Starrett

L.S. Starrett Insider Transactions Over The Last Year

In fact, the recent purchase by Lead Independent Director Thomas Riordan was not their only acquisition of L.S. Starrett shares this year. They previously made an even bigger purchase of US$139k worth of shares at a price of US$5.14 per share. That means that an insider was happy to buy shares at above the current price of US$4.27. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

In the last twelve months L.S. Starrett insiders were buying shares, but not selling. The average buy price was around US$4.06. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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).

Insider Ownership

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Based on our data, L.S. Starrett insiders have about 4.0% of the stock, worth approximately US$1.2m. We prefer to see high levels of insider ownership.

So What Does This Data Suggest About L.S. Starrett Insiders?

It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that L.S. Starrett insiders are expecting a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing L.S. Starrett. At Simply Wall St, we found 2 warning signs for L.S. Starrett that deserve your attention before buying any shares.

But note: L.S. Starrett 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.

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