Lemonade Insiders Placed Bullish Bets Worth US$1.48m

Multiple insiders secured a larger position in Lemonade, Inc. (NYSE:LMND) shares over the last 12 months. This is reassuring as this suggests that insiders have increased optimism about the company's prospects.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Lemonade

The Last 12 Months Of Insider Transactions At Lemonade

The Director Maria Angelidou-Smith made the biggest insider purchase in the last 12 months. That single transaction was for US$1.0m worth of shares at a price of US$33.23 each. That means that an insider was happy to buy shares at around the current price of US$36.12. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the Lemonade insiders decided to buy shares at close to current prices.

Happily, we note that in the last year insiders paid US$1.5m for 63.55k shares. But insiders sold 27.50k shares worth US$808k. Overall, Lemonade insiders were net buyers during the last year. The average buy price was around US$23.25. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today's share price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Lemonade is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Lemonade Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Lemonade shares. In total, insiders dumped US$577k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership Of Lemonade

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. It's great to see that Lemonade insiders own 5.6% of the company, worth about US$144m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Lemonade Insider Transactions Indicate?

Insiders haven't bought Lemonade stock in the last three months, but there was some selling. But we take heart from prior transactions. And insider ownership remains quite considerable. So we're happy to look past recent trading. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To assist with this, we've discovered 3 warning signs that you should run your eye over to get a better picture of Lemonade.

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.