We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Lee Enterprises, Incorporated (NYSE:LEE).
Do Insider Transactions Matter?
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 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.
The Last 12 Months Of Insider Transactions At Lee Enterprises
The Independent Director, William Mayer, made the biggest insider sale in the last 12 months. That single transaction was for US$214k worth of shares at a price of US$2.14 each. So what is clear is that an insider saw fit to sell at around the current price of US$1.81. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern. The only individual insider seller over the last year was William Mayer.
You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. 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 that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Lee Enterprises Insiders Are Selling The Stock
The last quarter saw substantial insider selling of Lee Enterprises shares. In total, Independent Director William Mayer dumped US$214k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
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. We usually like to see fairly high levels of insider ownership. From our data, it seems that Lee Enterprises insiders own 8.8% of the company, worth about US$9.2m. Whilst better than nothing, we're not overly impressed by these holdings.
So What Do The Lee Enterprises Insider Transactions Indicate?
An insider sold Lee Enterprises shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. When you combine this with the relatively low insider ownership, we are very cautious about the stock. We'd certainly think twice before buying! I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
Of course Lee Enterprises may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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 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.