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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in LeMaitre Vascular, Inc. (NASDAQ:LMAT).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
The Last 12 Months Of Insider Transactions At LeMaitre Vascular
Chairman & CEO George LeMaitre made the biggest insider sale in the last 12 months. That single transaction was for US$1.7m worth of shares at a price of US$34.70 each. So we know that an insider sold shares at around the present share price of US$30.26. They might be selling for a variety of reasons, but it's hard to argue this is a bullish sign. We usually pause to reflect on the potential that a stock has a high valuation, if insiders have been selling at around the current price.
We note that in the last year insiders divested 144.36k shares for a total of US$4.8m. In total, LeMaitre Vascular insiders sold more than they bought over the last year. The average sell price was around US$33.60. It's not ideal to see that insiders have sold at around the current price. But we don't put too much weight on the insider selling, since sellers could have personal reasons. 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!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
LeMaitre Vascular Insiders Are Selling The Stock
The last three months saw significant insider selling at LeMaitre Vascular. In total, Senior Vice President of Operations Trent Kamke dumped US$492k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the directors think that the shares are a bargain.
Insider Ownership of LeMaitre Vascular
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. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that LeMaitre Vascular insiders own 18% of the company, worth about US$110m. 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 Does This Data Suggest About LeMaitre Vascular Insiders?
An insider hasn't bought LeMaitre Vascular stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. But since LeMaitre Vascular is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. Of course, the future is what matters most. So if you are interested in LeMaitre Vascular, you should check out this free report on analyst forecasts for the company.
Of course LeMaitre Vascular may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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.