We wouldn't blame Lovisa Holdings Limited (ASX:LOV) shareholders if they were a little worried about the fact that Shane Fallscheer, the MD & Executive Director recently netted about AU$28m selling shares at an average price of AU$14.83. That's a big disposal, and it decreased their holding size by 46%, which is notable but not too bad.
Lovisa Holdings Insider Transactions Over The Last Year
In fact, the recent sale by Shane Fallscheer was the biggest sale of Lovisa Holdings shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at around the current price of AU$14.49. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.
Shane Fallscheer ditched 3.59m shares over the year. The average price per share was AU$13.07. 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!
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Insider Ownership of Lovisa Holdings
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. Lovisa Holdings insiders own 45% of the company, currently worth about AU$694m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Lovisa Holdings Tell Us?
An insider hasn't bought Lovisa Holdings stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Lovisa Holdings. In terms of investment risks, we've identified 5 warning signs with Lovisa Holdings and understanding these should be part of your investment process.
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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, but not derivative transactions.
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