Stock Analysis

Insiders who purchased Lument Finance Trust, Inc. (NYSE:LFT) earlier this year lose an additional US$68k as the stock sinks to US$1.87

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The recent price decline of 12% in Lument Finance Trust, Inc.'s (NYSE:LFT) stock may have disappointed insiders who bought US$237k worth of shares at an average price of US$2.63 in the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only US$168k.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Lument Finance Trust

Lument Finance Trust Insider Transactions Over The Last Year

The Independent Director James Hunt made the biggest insider purchase in the last 12 months. That single transaction was for US$71k worth of shares at a price of US$2.88 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$1.87). Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

Lument Finance Trust insiders may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

NYSE:LFT Insider Trading Volume March 16th 2023

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Have Lument Finance Trust Insiders Traded Recently?

There was some insider buying at Lument Finance Trust over the last quarter. Insiders shelled out US$9.5k for shares in that time. We like it when there are only buyers, and no sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Insider Ownership Of Lument Finance Trust

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data suggests Lument Finance Trust insiders own 2.7% of the company, worth about US$2.6m. However, it's possible that insiders might have an indirect interest through a more complex structure. I generally like to see higher levels of ownership.

What Might The Insider Transactions At Lument Finance Trust Tell Us?

Our data shows a little insider buying, but no selling, in the last three months. The net investment is not enough to encourage us much. But insiders have shown more of an appetite for the stock, over the last year. The transactions are fine but it'd be more encouraging if Lument Finance Trust insiders bought more shares in the company. 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. Every company has risks, and we've spotted 3 warning signs for Lument Finance Trust (of which 2 are a bit unpleasant!) you should know about.

Of course Lument Finance Trust 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, but not derivative transactions.

What are the risks and opportunities for Lument Finance Trust?

Lument Finance Trust, Inc., a real estate investment trust, focuses on investing in, financing, and managing a portfolio of commercial real estate (CRE) debt investments in the United States.

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  • Earnings are forecast to grow 40.12% per year


  • Debt is not well covered by operating cash flow

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