Insiders At Lloyds Banking Group Sold UK£6.3m In Stock, Alluding To Potential Weakness \

Over the past year, many Lloyds Banking Group plc (LON:LLOY) insiders sold a significant stake in the company which may have piqued investors' interest. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Lloyds Banking Group

Lloyds Banking Group Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Stephen Shelley, for UK£2.1m worth of shares, at about UK£0.52 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is UK£0.45. 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 12.87m shares, for UK£6.3m. In total, Lloyds Banking Group 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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Lloyds Banking Group Insiders Bought Stock Recently

It's good to see that Lloyds Banking Group insiders have made notable investments in the company's shares. Overall, two insiders shelled out UK£203k for shares in the company -- and none sold. That shows some optimism about the company's future.

Does Lloyds Banking Group Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 0.08% of Lloyds Banking Group shares, worth about UK£24m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Lloyds Banking Group Insiders?

It's certainly positive to see the recent insider purchases. On the other hand the transaction history, over the last year, isn't so positive. While recent transactions indicate confidence in Lloyds Banking Group, insiders don't own enough of the company to overcome our cautiousness about the longer term transactions. So they seem pretty well aligned, overall. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 1 warning sign for Lloyds Banking Group you should know about.

But note: Lloyds Banking Group 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.