Insiders who acquired US$827k worth of Loyalty Ventures Inc.'s (NASDAQ:LYLT) stock at an average price of US$21.17 in the past 12 months may be dismayed by the recent 22% price decline. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth US$54k which is not ideal.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
Loyalty Ventures Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when CEO, President & Director Charles Horn bought US$250k worth of shares at a price of US$42.00 per share. That means that even when the share price was higher than US$1.37 (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. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Loyalty Ventures insiders may have bought shares in the last year, but they didn't sell any. Their average price was about US$21.17. This is nice to see since it implies that insiders might see value around current prices. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insider Ownership Of Loyalty Ventures
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Our data isn't picking up on much insider ownership at Loyalty Ventures, though insiders do hold about US$95k worth of shares. It's always possible we are missing something but from our data, it looks like insider ownership is minimal.
So What Does This Data Suggest About Loyalty Ventures Insiders?
It doesn't really mean much that no insider has traded Loyalty Ventures shares in the last quarter. However, our analysis of transactions over the last year is heartening. The transactions are fine but it'd be more encouraging if Loyalty Ventures 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. When we did our research, we found 4 warning signs for Loyalty Ventures (2 can't be ignored!) that we believe deserve your full attention.
But note: Loyalty Ventures 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.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here