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 Lakeland Industries, Inc. (NASDAQ:LAKE), you may well want to know whether insiders have been buying or selling.
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 on the market. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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.'
Lakeland Industries Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Director, Thomas McAteer, for US$62k worth of shares, at about US$10.77 per share. That means that even when the share price was below the current price of US$12.25, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling on market, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 13.4% of Thomas McAteer's stake. Thomas McAteer was the only individual insider to sell shares in the last twelve months.
Thomas McAteer sold a total of 6000 shares over the year at an average price of US$10.58. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insider Ownership of Lakeland Industries
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. From our data, it seems that Lakeland Industries insiders own 6.8% of the company, worth about US$6.7m. We do generally prefer see higher levels of insider ownership.
So What Do The Lakeland Industries Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Lakeland Industries shares in the last quarter. Our analysis of Lakeland Industries insider transactions leaves us unenthusiastic. And we're not picking up on high enough insider ownership to give us any comfort. Of course, the future is what matters most. So if you are interested in Lakeland Industries, you should check out this free report on analyst forecasts for the company.
But note: Lakeland Industries 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.
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 firstname.lastname@example.org. 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.