Insiders who bought Live Verdure Ltd (ASX:LV1) last year must be regretting not buying more as market cap hits AU$21m

By
Simply Wall St
Published
September 27, 2021
ASX:LV1
Source: Shutterstock

Insiders who bought Live Verdure Ltd (ASX:LV1) stock in the last 12 months were richly rewarded last week. The company's market value increased by AU$3.6m as a result of the stock's 20% gain over the same period. In other words, the original AU$648k purchase is now worth AU$1.2m.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Live Verdure

Live Verdure Insider Transactions Over The Last Year

The insider Andrew Wilson made the biggest insider purchase in the last 12 months. That single transaction was for AU$518k worth of shares at a price of AU$0.25 each. Even though the purchase was made at a significantly lower price than the recent price (AU$0.39), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Andrew Wilson bought a total of 3.14m shares over the year at an average price of AU$0.21. The chart below shows insider transactions (by companies and 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!

insider-trading-volume
ASX:LV1 Insider Trading Volume September 28th 2021

Live Verdure is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Live Verdure Insiders Bought Stock Recently

Over the last three months, we've seen significantly more insider buying, than insider selling, at Live Verdure. insider Andrew Wilson spent AU$130k on stock. On the other hand, insider Andrew Wilson netted AU$45k by selling. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.

Insider Ownership of Live Verdure

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. 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 Live Verdure insiders own 33% of the company, worth about AU$7.0m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Live Verdure Insider Transactions Indicate?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Live Verdure insiders are well aligned, and that they may think the share price is too low. 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. At Simply Wall St, we've found that Live Verdure has 4 warning signs (1 is a bit concerning!) that deserve your attention before going any further with your analysis.

Of course Live Verdure 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. 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.

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Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.