Had insiders known Lorne Park Capital Partners Inc. (CVE:LPC) would hit CA$55m they might have invested more last year

Lorne Park Capital Partners Inc. (CVE:LPC) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 17%, resulting in a CA$7.8m rise in the company's market capitalisation. In other words, the original CA$80k purchase is now worth CA$102k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Lorne Park Capital Partners

The Last 12 Months Of Insider Transactions At Lorne Park Capital Partners

Notably, that recent sale by Craig Ellis is the biggest insider sale of Lorne Park Capital Partners shares that we've seen in the last year. That means that an insider was selling shares at below the current price (CA$1.05). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 22%of Craig Ellis's holding.

In the last twelve months insiders purchased 96.99k shares for CA$80k. On the other hand they divested 75.00k shares, for CA$79k. In total, Lorne Park Capital Partners insiders bought more than they sold over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Lorne Park Capital Partners Insiders Are Selling The Stock

We have seen a bit of insider selling at Lorne Park Capital Partners, over the last three months. CA$79k worth of shares were sold by insider Craig Ellis. But at least we saw CA$26k worth of buying. While it's not great to see insider selling, the net amount sold isn't enough for us to want to read anything into it.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Lorne Park Capital Partners insiders own 44% of the company, worth about CA$24m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Lorne Park Capital Partners Insiders?

Unfortunately, there has been more insider selling of Lorne Park Capital Partners stock, than buying, in the last three months. But we take heart from prior transactions. We are also comforted by the high levels of insider ownership. So the recent selling doesn't worry us. 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. While conducting our analysis, we found that Lorne Park Capital Partners has 4 warning signs and it would be unwise to ignore these.

But note: Lorne Park Capital Partners may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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, but not derivative transactions.

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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.