Lifco Insiders Added kr59.8m Of Stock To Their Holdings

Quite a few insiders have dramatically grown their holdings in Lifco AB (publ) (STO:LIFCO B) over the past 12 months. An insider's optimism about the company's prospects is a positive sign.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

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Lifco Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by CEO, President & Director Per Waldemarson for kr37m worth of shares, at about kr368 per share. That means that an insider was happy to buy shares at above the current price of kr336. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

In the last twelve months Lifco insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

View our latest analysis for Lifco

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 Lifco Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Lifco. Overall, four insiders shelled out kr17m for shares in the company -- and none sold. This is a positive in our book as it implies some confidence.

Insider Ownership Of Lifco

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. It's great to see that Lifco insiders own 51% of the company, worth about kr77b. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Lifco Tell Us?

It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Lifco. One for the watchlist, at least! 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 Lifco and understanding it should be part of your investment process.

Of course Lifco 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 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.