It is not uncommon to see companies perform well in the years after insiders buy shares. 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 before you buy or sell LendLease Group (ASX:LLC), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. 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. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
LendLease Group Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when Group CEO Stephen McCann sold AU$6.0m worth of shares at a price of AU$20.42 per share. While the sale doesn’t make us feel confident, we do note it was conducted at a price well above the current share price, which is AU$11.91. So it is hard to draw any strong conclusion from it. Stephen McCann was the only individual insider to sell shares in the last twelve months. Notably Stephen McCann was also the biggest buyer, having purchased AU$2.7m worth of shares.
Happily, we note that in the last year insiders paid AU$2.7m for 192.13k shares. But they sold 589.50k for AU$11m. Stephen McCann divested 589.50k shares over the last 12 months at an average price of AU$18.90. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
LendLease Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
LendLease Group Insiders Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at LendLease Group. Overall, 5 insiders shelled out AU$2.2m for shares in the company — and none sold. That shows some optimism about the company’s future.
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. LendLease Group insiders own about AU$19m worth of shares. That equates to 0.3% of the company. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At LendLease Group Tell Us?
The recent insider purchases are heartening. However, the longer term transactions are not so encouraging. While recent transactions indicate confidence in LendLease Group, insiders don’t own enough of the company to overcome our cautiousness about the longer term transactions. In short they are likely aligned with shareholders. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for LendLease Group.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.