Don't Ignore The Fact That This Insider Just Sold Some Shares In Loungers plc (LON:LGRS)

Some Loungers plc (LON:LGRS) shareholders may be a little concerned to see that the Founder & Commercial Director, Jacob Bishop, recently sold a substantial UK£1.4m worth of stock at a price of UK£2.15 per share. However, that sale only accounted for 9.1% of their holding, so arguably it doesn't say much about their conviction.

See our latest analysis for Loungers

Loungers Insider Transactions Over The Last Year

In fact, the recent sale by Jacob Bishop was the biggest sale of Loungers shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to take some cash off the table, even below the current price of UK£2.25. 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. We note that the biggest single sale was only 9.1%of Jacob Bishop's holding.

Over the last year, we can see that insiders have bought 1.57m shares worth UK£1.5m. But insiders sold 1.25m shares worth UK£2.7m. All up, insiders sold more shares in Loungers 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!

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Insider Ownership of Loungers

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Loungers insiders own about UK£38m worth of shares. That equates to 16% of the company. 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 Loungers Insiders?

Insiders sold stock recently, but they haven't been buying. Zooming out, the longer term picture doesn't give us much comfort. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. 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. Case in point: We've spotted 4 warning signs for Loungers you should be aware of, and 1 of these doesn't sit too well with us.

Of course Loungers may not be the best stock to buy. So you may wish to see this free collection of high quality 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, 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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