Lithium South Development Corporation (CVE:LIS) Insiders Increased Their Holdings

It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Lithium South Development Corporation (CVE:LIS).

Do Insider Transactions Matter?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.

Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

Check out our latest analysis for Lithium South Development

The Last 12 Months Of Insider Transactions At Lithium South Development

In the last twelve months, the biggest single purchase by an insider was when President Adrian F. Hobkirk bought CA$102k worth of shares at a price of CA$0.34 per share. Even though the purchase was made at a significantly lower price than the recent price (CA$0.84), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

In the last twelve months insiders purchased 377.62k shares for CA$123k. But they sold 65.12k shares for CA$61k. In the last twelve months there was more buying than selling by Lithium South Development insiders. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. 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).

Insiders at Lithium South Development Have Bought Stock Recently

There was some insider buying at Lithium South Development over the last quarter. In total, insiders bought CA$113k worth of shares in that time. On the other hand, Corporate Secretary Jan Urata sold CA$61k worth of shares. While it's good to see the insider buying, the net amount bought isn't enough for us to gain much confidence from it.

Does Lithium South Development Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data suggests Lithium South Development insiders own 1.7% of the company, worth about CA$665k. However, it's possible that insiders might have an indirect interest through a more complex structure. I generally like to see higher levels of ownership.

So What Do The Lithium South Development Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Lithium South Development insiders are expecting a bright future. 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 4 warning signs for Lithium South Development (of which 2 can't be ignored!) 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, but not derivative transactions.

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This article by Simply Wall St is general in nature. 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.
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