Insiders Of Limoneira Reap Rewards After Their Investment Jumps Another US$982k

Limoneira Company (NASDAQ:LMNR) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 11%, resulting in a US$50m rise in the company's market capitalisation, translating to a gain of 101% on their initial investment. Put another way, the original US$973.7k acquisition is now worth US$1.96m.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Limoneira

Limoneira Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Independent Director Peter Nolan for US$974k worth of shares, at about US$14.73 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$28.91. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Limoneira is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Limoneira 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 9.8% of Limoneira shares, worth about US$48m. 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 Limoneira Tell Us?

It doesn't really mean much that no insider has traded Limoneira shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Insiders own shares in Limoneira and we see no evidence to suggest they are worried about the future. 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. For example, Limoneira has 2 warning signs (and 1 which is potentially serious) we think you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.