Insiders who purchased US$256k worth of Largo Inc. (TSE:LGO) shares over the past year recouped some of their losses after price gained 10% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled US$100k since the time of purchase.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Largo Insider Transactions Over The Last Year
The President Paulo Misk made the biggest insider purchase in the last 12 months. That single transaction was for CA$191k worth of shares at a price of CA$12.58 each. That means that an insider was happy to buy shares at above the current price of CA$7.62. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
Happily, we note that in the last year insiders paid CA$256k for 20.50k shares. But they sold 10.00k shares for CA$160k. In the last twelve months there was more buying than selling by Largo insiders. You can see the insider transactions (by companies and 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!
Largo is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership Of Largo
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Based on our data, Largo insiders have about 0.7% of the stock, worth approximately CA$3.3m. We prefer to see high levels of insider ownership.
So What Do The Largo Insider Transactions Indicate?
There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. The transactions are fine but it'd be more encouraging if Largo insiders bought more shares in the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we found 1 warning sign for Largo that deserve your attention before buying any shares.
But note: Largo 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.
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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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