Investors who take an interest in Liberty Latin America Ltd. (NASDAQ:LILA) should definitely note that the Independent Director, Paul Gould, recently paid US$15.01 per share to buy US$150k worth of the stock. That's a very decent purchase to our minds and it grew their holding by a solid 10%.
The Last 12 Months Of Insider Transactions At Liberty Latin America
Over the last year, we can see that the biggest insider purchase was by Independent Director Brendan Paddick for US$3.7m worth of shares, at about US$19.13 per share. That means that even when the share price was higher than US$14.81 (the recent price), an insider wanted to purchase shares. 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. To us, it's very important to consider the price insiders pay for shares. 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.
Liberty Latin America insiders may have bought shares in the last year, but they didn't sell any. The chart below shows insider transactions (by 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!
Liberty Latin America is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does Liberty Latin America Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Liberty Latin America insiders own about US$202m worth of shares (which is 7.5% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Liberty Latin America Insider Transactions Indicate?
It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest Liberty Latin America insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 2 warning signs for Liberty Latin America you should be aware of.
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.
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