Had insiders known Little Green Pharma Ltd (ASX:LGP) would hit AU$54m they might have invested more last year
Last week, Little Green Pharma Ltd (ASX:LGP) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 14% last week, resulting in a AU$6.8m increase in the company's market worth. Put another way, the original AU$137k acquisition is now worth AU$140k.
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 Little Green Pharma
Little Green Pharma Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by insider Alexander Waislitz for AU$100k worth of shares, at about AU$0.20 per share. That means that an insider was happy to buy shares at around the current price of AU$0.20. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. In this case we're pleased to report that the insider bought shares at close to current prices. The only individual insider to buy over the last year was Alexander Waislitz. We note that Alexander Waislitz was both the biggest buyer and the biggest seller.
Alexander Waislitz bought a total of 700.00k shares over the year at an average price of AU$0.20. 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!
Little Green Pharma is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. 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 Little Green Pharma insiders own 16% of the company, worth about AU$8.7m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Little Green Pharma Insider Transactions Indicate?
There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Little Green Pharma and their transactions don't cause us concern. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 3 warning signs for Little Green Pharma (of which 1 is a bit unpleasant!) you should know about.
Of course Little Green Pharma 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.
Valuation is complex, but we're helping make it simple.
Find out whether Little Green Pharma is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free Analysis
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Little Green Pharma
Little Green Pharma Ltd engages in the cultivation, production, and distribution of medicinal cannabis products in Australia and internationally.
Mediocre balance sheet and slightly overvalued.