Stock Analysis

LondonMetric Property Plc's (LON:LMP)) market cap declines to UK£1.7b but insiders who sold UK£2.8m stock were able to hedge their losses

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LSE:LMP
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Insiders seem to have made the most of their holdings by selling UK£2.8m worth of LondonMetric Property Plc (LON:LMP) stock at an average sell price of UK£2.25 during the past year. The company's market valuation decreased by UK£162m after the stock price dropped 8.7% over the past week, but insiders were spared from painful losses.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for LondonMetric Property

LondonMetric Property Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the CEO & Executive Director, Andrew Jones, for UK£663k worth of shares, at about UK£2.36 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (UK£1.74). So it may not tell us anything about how insiders feel about the current share price.

Over the last year, we can see that insiders have bought 150.40k shares worth UK£291k. But they sold 1.24m shares for UK£2.8m. All up, insiders sold more shares in LondonMetric Property than they bought, over the last year. The sellers received a price of around UK£2.25, on average. Insider selling doesn't make us excited to buy. But we note that the selling, on average, was at well above the recently traded price of UK£1.74. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
LSE:LMP Insider Trading Volume March 14th 2023

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

Does LondonMetric Property Boast High Insider Ownership?

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. I reckon it's a good sign if insiders own a significant number of shares in the company. LondonMetric Property insiders own about UK£46m worth of shares. That equates to 2.7% 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 LondonMetric Property Insiders?

It doesn't really mean much that no insider has traded LondonMetric Property shares in the last quarter. We don't take much encouragement from the transactions by LondonMetric Property insiders. The modest level of insider ownership is, at least, some comfort. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Our analysis shows 3 warning signs for LondonMetric Property (1 shouldn't be ignored!) and we strongly recommend you look at them before investing.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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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