We often see insiders buying up shares in companies that perform well over the long term. 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 Laneway Resources Limited (ASX:LNY).
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.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
Laneway Resources Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Non-Executive Director, Peter Wright, sold AU$129k worth of shares at a price of AU$0.011 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (AU$0.006). So it is hard to draw any strong conclusion from it. Notably Peter Wright was also the biggest buyer, having purchased AU$26k worth of shares.
Over the last year, we can see that insiders have bought 7656670 shares worth AU$26k. On the other hand they divested 38819224 shares, for AU$242k. All up, insiders sold more shares in Laneway Resources than they bought, over the last year. The sellers received a price of around AU$0.0062, on average. It's not too encouraging to see that insiders have sold at below the current price. Since insiders sell for many reasons, we wouldn't put too much weight on it. 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 Laneway Resources
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Laneway Resources insiders own about AU$5.8m worth of shares. That equates to 26% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Laneway Resources Tell Us?
The fact that there have been no Laneway Resources insider transactions recently certainly doesn't bother us. Our analysis of Laneway Resources insider transactions leaves us cautious. But we do like the fact that insiders own a fair chunk of the company. Along with insider transactions, I recommend checking if Laneway Resources is growing revenue. This free chart of historic revenue and earnings should make that easy.
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.
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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.