Lea Bank Insider Confidence Rewarded, Stock Hits kr1.1b Market Cap

Lea Bank AB (STO:LEA) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 13%, resulting in a kr124m rise in the company's market capitalisation, translating to a gain of 28% on their initial investment. In other words, the original kr1.82m purchase is now worth kr2.33m.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Lea Bank

Lea Bank Insider Transactions Over The Last Year

The Chief Commercial Officer Andreas Andersson made the biggest insider purchase in the last 12 months. That single transaction was for kr758k worth of shares at a price of kr10.10 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of kr11.30. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Lea Bank insiders may have bought shares in the last year, but they didn't sell any. Their average price was about kr8.80. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today's share price. 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insiders At Lea Bank Have Bought Stock Recently

It's good to see that Lea Bank insiders have made notable investments in the company's shares. Chief Commercial Officer Andreas Andersson spent kr758k on stock, and there wasn't any selling. This could be interpreted as suggesting a positive outlook.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company 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. Lea Bank insiders own about kr161m worth of shares. That equates to 15% 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 Lea Bank Insiders?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Lea Bank. Looks promising! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 1 warning sign with Lea Bank and understanding it should be part of your investment process.

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.