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We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Lakeland Industries, Inc. (NASDAQ:LAKE).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
The Last 12 Months Of Insider Transactions At Lakeland Industries
In the last twelve months, the biggest single sale by an insider was when the Director, Thomas McAteer, sold US$62k worth of shares at a price of US$10.77 per share. That means that even when the share price was below the current price of US$12.36, 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. However, while insider selling is sometimes discouraging, it’s only a weak signal. This single sale was just 13.4% of Thomas McAteer’s stake. Thomas McAteer was the only individual insider to sell shares in the last twelve months.
Thomas McAteer divested 6000 shares over the last 12 months at an average price of US$10.58. You can see the insider transactions (by 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!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insider Ownership of Lakeland Industries
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. From our data, it seems that Lakeland Industries insiders own 6.8% of the company, worth about US$6.8m. We do generally prefer see higher levels of insider ownership.
So What Do The Lakeland Industries Insider Transactions Indicate?
The fact that there have been no Lakeland Industries insider transactions recently certainly doesn’t bother us. The insider transactions at Lakeland Industries are not inspiring us to buy. And we’re not picking up on high enough insider ownership to give us any comfort. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Lakeland Industries.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.