Walter McLallen Bought 26% More Shares In Lovesac

Investors who take an interest in The Lovesac Company (NASDAQ:LOVE) should definitely note that the Independent Director, Walter McLallen, recently paid US$24.50 per share to buy US$123k worth of the stock. That's a very decent purchase to our minds and it grew their holding by a solid 26%.

Check out our latest analysis for Lovesac

Lovesac Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Founder, Shawn Nelson, sold US$556k worth of shares at a price of US$23.35 per share. That means that even when the share price was below the current price of US$24.88, 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. It is worth noting that this sale was only 10% of Shawn Nelson's holding.

In the last twelve months insiders purchased 40.90k shares for US$893k. But insiders sold 39.86k shares worth US$952k. Over the last year we saw more insider selling of Lovesac shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Lovesac better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Does Lovesac Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. It appears that Lovesac insiders own 5.4% of the company, worth about US$21m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Lovesac Tell Us?

The stark truth for Lovesac is that there has been more insider selling than insider buying in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we've identified 3 warning signs with Lovesac and understanding these should be part of your investment process.

Of course Lovesac 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.