Stock Analysis

Lloyds Banking Group plc (LON:LLOY) Insiders Increased Their Holdings

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LSE:LLOY
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We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Lloyds Banking Group plc (LON:LLOY).

What Is Insider Selling?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.

Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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 Lloyds Banking Group

Lloyds Banking Group Insider Transactions Over The Last Year

The CFO & Executive Director William Leon Chalmers made the biggest insider purchase in the last 12 months. That single transaction was for UK£269k worth of shares at a price of UK£0.27 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of UK£0.39. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Happily, we note that in the last year insiders paid UK£695k for 2.45m shares. But they sold 721.00k shares for UK£257k. In total, Lloyds Banking Group insiders bought more than they sold 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!

insider-trading-volume
LSE:LLOY Insider Trading Volume March 1st 2021

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).

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. Lloyds Banking Group insiders own about UK£49m worth of shares. That equates to 0.2% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

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

The fact that there have been no Lloyds Banking Group insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. Insiders own shares in Lloyds Banking Group and we see no evidence to suggest they are worried about the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Lloyds Banking Group. Be aware that Lloyds Banking Group is showing 2 warning signs in our investment analysis, and 1 of those shouldn't be ignored...

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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