Investors who take an interest in Louisiana-Pacific Corporation (NYSE:LPX) should definitely note that the Independent Director, Stephen Macadam, recently paid US$20.96 per share to buy US$105k worth of the stock. We reckon that’s a good sign, especially since the purchase boosted their holding by 105%.
Louisiana-Pacific Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Independent Chairman of the Board, E. Cook, for US$300k worth of shares, at about US$29.95 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 good news is that this large sale was at well above current price of US$21.90. So it may not tell us anything about how insiders feel about the current share price. E. Cook was the only individual insider to sell over the last year.
Over the last year, we can see that insiders have bought 12.35k shares worth US$314k. But they sold 10000 shares for US$300k. Overall, Louisiana-Pacific insiders were net buyers during the last year. They paid about US$25.40 on average. I’d consider this a positive as it suggests insiders see value at around the current price. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Louisiana-Pacific is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Louisiana-Pacific
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it’s a good sign if insiders own a significant number of shares in the company. Louisiana-Pacific insiders own about US$11m worth of shares. That equates to 0.5% of the company. 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 Louisiana-Pacific Insiders?
It’s certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. Given that insiders also own a fair bit of Louisiana-Pacific we think they are probably pretty confident of a bright future. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. Case in point: We’ve spotted 5 warning signs for Louisiana-Pacific you should be aware of.
But note: Louisiana-Pacific 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.
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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