Some La-Z-Boy Incorporated (NYSE:LZB) shareholders may be a little concerned to see that the Senior VP & President of La-Z-Boy Portfolio Brands, Otis Sawyer, recently sold a substantial US$633k worth of stock at a price of US$35.15 per share. That sale reduced their total holding by 29% which is hardly insignificant, but far from the worst we've seen.
The Last 12 Months Of Insider Transactions At La-Z-Boy
The Non-Executive Chairman of the Board, Kurt Darrow, made the biggest insider sale in the last 12 months. That single transaction was for US$5.9m worth of shares at a price of US$39.69 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$34.53. So it may not tell us anything about how insiders feel about the current share price.
Over the last year we saw more insider selling of La-Z-Boy shares, than buying. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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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. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that La-Z-Boy insiders own 1.4% of the company, worth about US$22m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The La-Z-Boy Insider Transactions Indicate?
Insiders sold La-Z-Boy shares recently, but they didn't buy any. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But since La-Z-Boy is profitable and growing, we're not too worried by this. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 2 warning signs for La-Z-Boy you should know about.
But note: La-Z-Boy 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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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.
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