Hopeful Week For Insiders Who Bought AU$1.47m Of Lachlan Star Stock

Insiders who bought AU$1.47m worth of Lachlan Star Limited (ASX:LSA) stock in the last year have seen some of their losses recouped as the stock gained 10.0% last week. However, total losses seen by insiders are still AU$317k since the time of purchase.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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Lachlan Star Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Timothy Rupert Goyder bought AU$400k worth of shares at a price of AU$0.10 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.055). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

While Lachlan Star insiders bought shares during the last year, they didn't sell. The average buy price was around AU$0.07. I'd consider this a positive as it suggests insiders see value at around the current price. You can see a visual depiction of insider transactions (by companies and 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!

See our latest analysis for Lachlan Star

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Lachlan Star Insiders Bought Stock Recently

It's good to see that Lachlan Star insiders have made notable investments in the company's shares. Specifically, insider Timothy Rupert Goyder bought AU$544k worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.

Insider Ownership

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. Insiders own 16% of Lachlan Star shares, worth about AU$2.6m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Lachlan Star Tell Us?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Lachlan Star insiders are well aligned, and that they may think the share price is too low. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Lachlan Star. When we did our research, we found 5 warning signs for Lachlan Star (3 make us uncomfortable!) that we believe deserve your full attention.

Of course Lachlan Star 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 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.