Don't Ignore The Insider Selling In James Latham

We'd be surprised if James Latham plc (LON:LTHM) shareholders haven't noticed that the MD & Executive Director, Andrew Wright, recently sold UK£101k worth of stock at UK£11.60 per share. That sale was 24% of their holding, so it does make us raise an eyebrow.

View our latest analysis for James Latham

James Latham Insider Transactions Over The Last Year

Notably, that recent sale by Andrew Wright is the biggest insider sale of James Latham shares that we've seen in the last year. That means that an insider was selling shares at below the current price (UK£11.70). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 24% of Andrew Wright's stake.

Over the last year, we can see that insiders have bought 2.95k shares worth UK£32k. But they sold 8.69k shares for UK£101k. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Does James Latham Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. James Latham insiders own about UK£72m worth of shares. That equates to 31% 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 James Latham Insiders?

An insider sold stock recently, but they haven't been buying. Despite some insider buying, the longer term picture doesn't make us feel much more positive. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing James Latham. To help with this, we've discovered 2 warning signs (1 shouldn't be ignored!) that you ought to be aware of before buying any shares in James Latham.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.