Insiders At Lloyds Banking Group Sold UK£4.6m In Stock, Alluding To Potential Weakness

In the last year, many Lloyds Banking Group plc (LON:LLOY) insiders sold a substantial stake in the company which may have sparked shareholders' attention. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

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.

See our latest analysis for Lloyds Banking Group

The Last 12 Months Of Insider Transactions At Lloyds Banking Group

The insider, Stephen Shelley, made the biggest insider sale in the last 12 months. That single transaction was for UK£2.1m worth of shares at a price of UK£0.52 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of UK£0.43. So it may not shed much light on insider confidence at current levels.

Happily, we note that in the last year insiders paid UK£203k for 422.27k shares. On the other hand they divested 9.21m shares, for UK£4.6m. All up, insiders sold more shares in Lloyds Banking Group than they bought, over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Lloyds Banking Group better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insiders At Lloyds Banking Group Have Sold Stock Recently

The last quarter saw substantial insider selling of Lloyds Banking Group shares. In total, insider Andrew Walton dumped UK£150k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Lloyds Banking Group insiders own about UK£27m worth of shares. That equates to 0.1% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Lloyds Banking Group Insider Transactions Indicate?

An insider sold Lloyds Banking Group shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. But since Lloyds Banking Group is profitable and growing, we're not too worried by this. While insiders do own shares, they don't own a heap, and they have been selling. We're in no rush to buy! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 2 warning signs for Lloyds Banking Group you should be aware of, and 1 of them is significant.

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 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.