Insiders At LifeStance Health Group Sold US$5.7m In Stock, Alluding To Potential Weakness

Many LifeStance Health Group, Inc. (NASDAQ:LFST) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for LifeStance Health Group

LifeStance Health Group Insider Transactions Over The Last Year

The CEO & Chairman, Kenneth Burdick, made the biggest insider sale in the last 12 months. That single transaction was for US$1.3m worth of shares at a price of US$6.28 each. That means that an insider was selling shares at slightly below the current price (US$7.21). 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 6.8% of Kenneth Burdick's stake.

Insiders in LifeStance Health Group didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like LifeStance Health Group 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 LifeStance Health Group Have Sold Stock Recently

Over the last three months, we've seen a bit of insider selling at LifeStance Health Group. Chief People Officer Ann Varanakis sold just US$33k worth of shares in that time. It's not great to see insider selling, nor the lack of recent buyers. But the volume sold is so low that it really doesn't bother us.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. LifeStance Health Group insiders own 13% of the company, currently worth about US$367m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At LifeStance Health Group Tell Us?

While there has not been any insider buying in the last three months, there has been selling. But given the selling was modest, we're not worried. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the LifeStance Health Group insiders selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing LifeStance Health Group. At Simply Wall St, we found 1 warning sign for LifeStance Health Group that deserve your attention before buying any shares.

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.