Insiders At Lamb Weston Holdings Sold US$6.6m In Stock, Alluding To Potential Weakness

The fact that multiple Lamb Weston Holdings, Inc. (NYSE:LW) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Lamb Weston Holdings

The Last 12 Months Of Insider Transactions At Lamb Weston Holdings

Over the last year, we can see that the biggest insider sale was by the insider, Diane Dietz, for US$4.6m worth of shares, at about US$62.70 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$79.17. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 50% of Diane Dietz's stake.

Over the last year, we can see that insiders have bought 15.00k shares worth US$832k. On the other hand they divested 105.77k shares, for US$6.6m. Over the last year we saw more insider selling of Lamb Weston Holdings shares, than buying. The chart below shows insider transactions (by companies and individuals) over the last year. 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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Lamb Weston Holdings Insiders Are Selling The Stock

The last three months saw significant insider selling at Lamb Weston Holdings. In total, insiders dumped US$6.6m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 0.7% of Lamb Weston Holdings shares, worth about US$77m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Lamb Weston Holdings Tell Us?

Insiders 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. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! 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. To that end, you should learn about the 4 warning signs we've spotted with Lamb Weston Holdings (including 1 which is concerning).

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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.