We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we'll take a look at whether insiders have been buying or selling shares in Liberty Latin America Ltd. (NASDAQ:LILA).
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 in the company. However, most countries require that the company discloses such transactions to the market.
We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
Liberty Latin America Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Senior VP & CFO Christopher Noyes for US$259k worth of shares, at about US$17.24 per share. So it's clear an insider wanted to buy, at around the current price, which is US$18.51. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for Liberty Latin America share holders is that insiders were buying at near the current price.
Happily, we note that in the last year insiders bought 61110 shares for a total of US$1.1m. In the last twelve months Liberty Latin America insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Liberty Latin America is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders at Liberty Latin America Have Bought Stock Recently
It's good to see that Liberty Latin America insiders have made notable investments in the company's shares. Overall, two insiders shelled out US$758k for shares in the company -- and none sold. That shows some optimism about the company's future.
Insider Ownership of Liberty Latin America
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Liberty Latin America insiders own 7.3% of the company, worth about US$241m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Liberty Latin America Insider Transactions Indicate?
The recent insider purchases are heartening. 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. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Liberty Latin America. One for the watchlist, at least! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Liberty Latin America.
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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If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.