Lifestyle Communities Insiders Placed Bullish Bets Worth AU$10.2m

Quite a few insiders have dramatically grown their holdings in Lifestyle Communities Limited (ASX:LIC) over the past 12 months. An insider's optimism about the company's prospects is a positive sign.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Lifestyle Communities

Lifestyle Communities Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Founder James Kelly bought AU$10.0m worth of shares at a price of AU$16.00 per share. That means that an insider was happy to buy shares at above the current price of AU$7.35. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. 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.

In the last twelve months Lifestyle Communities insiders were buying shares, but not selling. 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Lifestyle Communities Insiders Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at Lifestyle Communities. Non-Executive Director JoAnne Stephenson purchased AU$39k worth of shares in that period. It's good to see the insider buying, as well as the lack of recent sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Insider Ownership Of Lifestyle Communities

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Lifestyle Communities insiders own about AU$57m worth of shares. That equates to 6.5% of the company. 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 Does This Data Suggest About Lifestyle Communities Insiders?

We note a that there has been a bit of insider buying recently (but no selling). The net investment is not enough to encourage us much. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Lifestyle Communities insiders are doubting the company, and they do own shares. 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 Lifestyle Communities you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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 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.