Life Time Group Holdings Insiders Sell US$1.1m Of Stock, Possibly Signalling Caution

Quite a few Life Time Group Holdings, Inc. (NYSE:LTH) insiders sold their shares over the past year, which may be a cause for concern. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Life Time Group Holdings

The Last 12 Months Of Insider Transactions At Life Time Group Holdings

The Founder Bahram Akradi made the biggest insider purchase in the last 12 months. That single transaction was for US$654k worth of shares at a price of US$16.76 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$23.12. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

All up, insiders sold more shares in Life Time Group Holdings than they bought, over the last year. 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!

I will like Life Time Group Holdings 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.

Insiders At Life Time Group Holdings Have Sold Stock Recently

The last quarter saw substantial insider selling of Life Time Group Holdings shares. In total, CFO, Principal Accounting Officer Erik Weaver dumped US$121k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Does Life Time Group Holdings 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Life Time Group Holdings insiders own about US$328m worth of shares (which is 7.0% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Life Time Group Holdings Tell Us?

An insider sold stock recently, but they haven't been buying. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But it is good to see that Life Time Group Holdings is growing earnings. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Life Time Group Holdings. To that end, you should learn about the 2 warning signs we've spotted with Life Time Group Holdings (including 1 which is concerning).

But note: Life Time Group Holdings 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.