Don't Ignore The Insider Selling In Liquidity Services

We wouldn't blame Liquidity Services, Inc. (NASDAQ:LQDT) shareholders if they were a little worried about the fact that Jaime Mateus-Tique, the Director recently netted about US$4.9m selling shares at an average price of US$32.64. That's a big disposal, and it decreased their holding size by 19%, which is notable but not too bad.

See our latest analysis for Liquidity Services

Liquidity Services Insider Transactions Over The Last Year

In fact, the recent sale by Jaime Mateus-Tique was the biggest sale of Liquidity Services shares made by an insider individual in the last twelve months, according to our records. So we know that an insider sold shares at around the present share price of US$31.41. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

In the last year Liquidity Services insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of Liquidity Services

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Liquidity Services insiders own about US$256m worth of shares (which is 27% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Liquidity Services Insiders?

Insiders sold Liquidity Services shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Liquidity Services. At Simply Wall St, we found 1 warning sign for Liquidity Services that deserve your attention before buying any shares.

But note: Liquidity Services 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 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.