Lycopodium Independent Non-Executive Director Acquires 41% More Stock

Even if it's not a huge purchase, we think it was good to see that Steven Chadwick, the Independent Non-Executive Director of Lycopodium Limited (ASX:LYL) recently shelled out AU$98k to buy stock, at AU$12.20 per share. While we're hesitant to get too excited about a purchase of that size, we do note it increased their holding by a solid 41%.

See our latest analysis for Lycopodium

The Last 12 Months Of Insider Transactions At Lycopodium

The Executive Director, Bruno Ruggiero, made the biggest insider sale in the last 12 months. That single transaction was for AU$16m worth of shares at a price of AU$11.91 each. That means that even when the share price was below the current price of AU$12.19, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 45% of Bruno Ruggiero's stake.

Over the last year we saw more insider selling of Lycopodium shares, than buying. 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!

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Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Lycopodium insiders own about AU$165m worth of shares (which is 35% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Lycopodium Insiders?

It's certainly positive to see the recent insider purchase. But we can't say the same for the transactions over the last 12 months. The recent buying by an insider , along with high insider ownership, suggest that Lycopodium insiders are fairly aligned, and optimistic. While it's good to be aware of 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. To help with this, we've discovered 2 warning signs (1 is a bit concerning!) that you ought to be aware of before buying any shares in Lycopodium.

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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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.