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Lakeland Financial Corporation (NASDAQ:LKFN) Insiders Have Been Selling

Simply Wall St

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 shareholders might well want to know whether insiders have been buying or selling shares in Lakeland Financial Corporation (NASDAQ:LKFN).

Do Insider Transactions Matter?

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, 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.

View our latest analysis for Lakeland Financial

The Last 12 Months Of Insider Transactions At Lakeland Financial

Over the last year, we can see that the biggest insider sale was by the Chairman, Michael Kubacki, for US$473k worth of shares, at about US$43.23 per share. So what is clear is that an insider saw fit to sell at around the current price of US$42.98. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

In the last twelve months insiders purchased 36556 shares for US$1.6m. But insiders sold 37365 shares worth US$1.7m. All up, insiders sold more shares in Lakeland Financial than they bought, over the last year. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

NasdaqGS:LKFN Recent Insider Trading, October 8th 2019
NasdaqGS:LKFN Recent Insider Trading, October 8th 2019

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 Lakeland Financial Have Sold Stock Recently

Over the last three months, we've seen notably more insider selling, than insider buying, at Lakeland Financial. In total, insiders sold US$818k worth of shares in that time. On the other hand we note insiders bought US$468k worth of shares. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the shares are not cheap.

Insider Ownership of Lakeland Financial

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 3.7% of Lakeland Financial shares, worth about US$41m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Lakeland Financial Insider Transactions Indicate?

Unfortunately, there has been more insider selling of Lakeland Financial stock, than buying, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. But since Lakeland Financial is profitable and growing, we're not too worried by this. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd think twice before buying! If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.

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.

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 editorial-team@simplywallst.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.