Have Insiders Been Buying Lok'nStore Group Plc (LON:LOK) Shares?

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Lok'nStore Group Plc (LON:LOK), you may well want to know whether insiders have been buying or selling.

Do Insider Transactions Matter?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

See our latest analysis for Lok'nStore Group

The Last 12 Months Of Insider Transactions At Lok'nStore Group

The Independent Non Executive Director Charles Peal made the biggest insider purchase in the last 12 months. That single transaction was for UK£71k worth of shares at a price of UK£4.98 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of UK£6.45. 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£161k for 30.95k shares. But they sold 5.00k shares for UK£28k. Overall, Lok'nStore Group insiders were net buyers during 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!

Lok'nStore Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insiders at Lok'nStore Group Have Bought Stock Recently

Over the last three months, we've seen significantly more insider buying, than insider selling, at Lok'nStore Group. In total, two insiders bought UK£80k worth of shares in that time. But Non-Executive Director Simon Thomas sold shares worth UK£28k. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.

Insider Ownership of Lok'nStore Group

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Lok'nStore Group insiders own about UK£52m worth of shares. That equates to 28% 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 Lok'nStore Group Insider Transactions Indicate?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. Given that insiders also own a fair bit of Lok'nStore Group we think they are probably pretty confident of a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that Lok'nStore Group has 2 warning signs and it would be unwise to ignore them.

But note: Lok'nStore 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.

If you decide to trade Lok'nStore Group, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.