Don't Ignore The Insider Selling In Lifeway Foods

We'd be surprised if Lifeway Foods, Inc. (NASDAQ:LWAY) shareholders haven't noticed that the Chairperson of the Board, Julie Smolyansky, recently sold US$210k worth of stock at US$14.01 per share. However, the silver lining is that the sale only reduced their total holding by 0.7%, so we're hesitant to read anything much into it, on its own.

Check out our latest analysis for Lifeway Foods

The Last 12 Months Of Insider Transactions At Lifeway Foods

In the last twelve months, the biggest single sale by an insider was when the insider, Ludmila Smolyansky, sold US$750k worth of shares at a price of US$6.00 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$14.27. 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. We note that the biggest single sale was only 6.9% of Ludmila Smolyansky's holding.

Over the last year we saw more insider selling of Lifeway Foods shares, than buying. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insider Ownership Of Lifeway Foods

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Lifeway Foods insiders own 44% of the company, worth about US$93m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Lifeway Foods Insider Transactions Indicate?

An insider sold stock recently, but they haven't been buying. And our longer term analysis of insider transactions didn't bring confidence, either. But since Lifeway Foods is profitable and growing, we're not too worried by this. 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 Lifeway Foods. To that end, you should learn about the 2 warning signs we've spotted with Lifeway Foods (including 1 which is concerning).

Of course Lifeway Foods 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.