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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 before you buy or sell Loncor Resources Inc. (TSE:LN), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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'.
Loncor Resources Insider Transactions Over The Last Year
The CEO & Director Arnold Kondrat made the biggest insider purchase in the last 12 months. That single transaction was for CA$135k worth of shares at a price of CA$0.50 each. Even though the purchase was made at a significantly lower price than the recent price (CA$0.74), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
Over the last year, we can see that insiders have bought 1.77m shares worth CA$493k. But they sold 200.00 shares for CA$198. In the last twelve months there was more buying than selling by Loncor Resources insiders. Their average price was about CA$0.28. To my mind it is good that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Are Loncor Resources Insiders Buying Or Selling?
In the last three months company Independent Director Zhengquan Chen divested CA$198 worth of stock. That is not a lot. Ultimately the overall selling isn't enough to tell us much.
Does Loncor Resources Boast High Insider Ownership?
Many investors like to check how much of a company is owned by 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. It appears that Loncor Resources insiders own 25% of the company, worth about CA$23m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Loncor Resources Insiders?
While there has not been any insider buying in the last three months, there has been selling. However, the sales are not big enough to concern us at all. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Loncor Resources insiders are doubting the company, and they do own shares. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example, Loncor Resources has 5 warning signs (and 2 which shouldn't be ignored) we think you should know about.
Of course Loncor Resources 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.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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