Lithium Americas Insiders Sell US$1.2m Of Stock, Possibly Signalling Caution

Lithium Americas Corp. (TSE:LAC) shareholders may have reason to be concerned, as several insiders sold their shares over the past year. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, if numerous insiders are selling, shareholders should investigate more.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Lithium Americas

The Last 12 Months Of Insider Transactions At Lithium Americas

The Vice President of Resource Development, Alexi Zawadzki, made the biggest insider sale in the last 12 months. That single transaction was for CA$525k worth of shares at a price of CA$3.65 each. That means that an insider was selling shares at slightly below the current price (CA$5.11). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 25% of Alexi Zawadzki's holding.

Happily, we note that in the last year insiders paid CA$70k for 10.93k shares. But insiders sold 265.39k shares worth CA$1.2m. In total, Lithium Americas insiders sold more than they bought over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Does Lithium Americas Boast High 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. Our data suggests Lithium Americas insiders own 0.8% of the company, worth about CA$6.2m. We prefer to see high levels of insider ownership.

So What Do The Lithium Americas Insider Transactions Indicate?

The fact that there have been no Lithium Americas insider transactions recently certainly doesn't bother us. Our analysis of Lithium Americas insider transactions leaves us unenthusiastic. And usually insiders own more stock in the company, according to our data. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example, Lithium Americas has 3 warning signs (and 2 which are a bit concerning) we think you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.