Even though Largo Inc.'s (TSE:LGO) stock is down 16% this week, insiders who bought lately made a US$52k profit

By
Simply Wall St
Published
March 18, 2022
TSX:LGO
Source: Shutterstock

Insiders who bought Largo Inc. (TSE:LGO) in the last 12 months may probably not pay attention to the stock's recent 16% drop. Even after accounting for the recent loss, the US$602k worth of stock purchased by them is now worth US$654k or in other words, their investment continues to give good returns.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Largo

Largo Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Independent Co-Chairman Ian Robertson bought CA$509k worth of shares at a price of CA$14.14 per share. That implies that an insider found the current price of CA$15.10 per share to be enticing. 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. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. In this case we're pleased to report that the insider purchases were made at close to current prices.

Over the last year, we can see that insiders have bought 43.33k shares worth CA$602k. On the other hand they divested 14.60k shares, for CA$281k. Overall, Largo insiders were net buyers during 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!

insider-trading-volume
TSX:LGO Insider Trading Volume March 18th 2022

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

Insiders at Largo Have Bought Stock Recently

There was some insider buying at Largo over the last quarter. Independent Director Koko Yamamoto shelled out CA$50k for shares in that time. It's great to see that insiders are only buying, not selling. However, in this case the amount invested recently is quite small.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Our data suggests Largo insiders own 0.6% of the company, worth about CA$5.8m. We prefer to see high levels of insider ownership.

So What Does This Data Suggest About Largo Insiders?

Our data shows a little insider buying, but no selling, in the last three months. That said, the purchases were not large. However, our analysis of transactions over the last year is heartening. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Largo stock. 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. Every company has risks, and we've spotted 1 warning sign for Largo you should know about.

But note: Largo 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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