Stock Analysis

How Much Are Lakeland Industries, Inc. (NASDAQ:LAKE) Insiders Taking Off The Table?

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NasdaqGM:LAKE
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It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Lakeland Industries, Inc. (NASDAQ:LAKE), you may well want to know whether insiders have been buying or selling.

What Is Insider Buying?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.

We don't think shareholders should simply follow insider transactions. 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'.

Check out our latest analysis for Lakeland Industries

Lakeland Industries Insider Transactions Over The Last Year

The Executive Chairman, Christopher Ryan, made the biggest insider sale in the last 12 months. That single transaction was for US$2.8m worth of shares at a price of US$16.66 each. That means that even when the share price was below the current price of US$26.51, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 39% of Christopher Ryan's holding. Christopher Ryan was the only individual insider to sell shares in the last twelve months.

Christopher Ryan divested 357.49k shares over the last 12 months at an average price of US$19.67. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
NasdaqGM:LAKE Insider Trading Volume December 31st 2020

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Lakeland Industries Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Our data indicates that Lakeland Industries insiders own about US$5.8m worth of shares (which is 2.8% of the company). We do generally prefer see higher levels of insider ownership.

So What Does This Data Suggest About Lakeland Industries Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. We don't take much encouragement from the transactions by Lakeland Industries insiders. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. 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. For example, Lakeland Industries has 2 warning signs (and 1 which is significant) we think you should know about.

But note: Lakeland Industries 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.

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What are the risks and opportunities for Lakeland Industries?

Lakeland Industries, Inc. manufactures and sells industrial protective clothing and accessories for the industrial and public protective clothing market worldwide.

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Rewards

  • Earnings are forecast to grow 111.62% per year

Risks

  • Profit margins (2%) are lower than last year (14.8%)

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Lakeland Industries

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