Stock Analysis

Co-Founder Daniel Schreiber Just Sold A Bunch Of Shares In Lemonade, Inc. (NYSE:LMND)

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NYSE:LMND
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We wouldn't blame Lemonade, Inc. (NYSE:LMND) shareholders if they were a little worried about the fact that Daniel Schreiber, the Co-Founder recently netted about US$48m selling shares at an average price of US$159. Probably the most concerning element of the whole transaction is that the disposal amounted to 86% of their entire holding.

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Lemonade Insider Transactions Over The Last Year

In fact, the recent sale by Daniel Schreiber was the biggest sale of Lemonade shares made by an insider individual in the last twelve months, according to our records. So we know that an insider sold shares at around the present share price of US$153. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

Insiders in Lemonade 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. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NYSE:LMND Insider Trading Volume January 23rd 2021

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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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Lemonade insiders own 7.2% of the company, worth about US$660m. 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 Lemonade Tell Us?

Insiders sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. 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 Lemonade. Case in point: We've spotted 4 warning signs for Lemonade you should be aware of, and 1 of them is a bit unpleasant.

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, but not derivative transactions.

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