Possible Bearish Signals With Louisiana-Pacific Insiders Disposing Stock

Over the past year, many Louisiana-Pacific Corporation (NYSE:LPX) insiders sold a significant stake in the company which may have piqued investors' interest. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Louisiana-Pacific

The Last 12 Months Of Insider Transactions At Louisiana-Pacific

In the last twelve months, the biggest single sale by an insider was when the Chairman & CEO, William Southern, sold US$3.0m worth of shares at a price of US$93.44 per share. That means that even when the share price was below the current price of US$118, an insider wanted to cash in some shares. 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 5.7% of William Southern's holding.

Insiders in Louisiana-Pacific 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Insiders At Louisiana-Pacific Have Sold Stock Recently

The last three months saw some Louisiana-Pacific insider selling. Independent Director Ozey Horton only netted US$34k selling shares, in that period. Neither the lack of buying nor the presence of selling is heartening. But the volume sold is so low that it really doesn't bother us.

Insider Ownership Of Louisiana-Pacific

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. It's great to see that Louisiana-Pacific insiders own 1.4% of the company, worth about US$113m. 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 Does This Data Suggest About Louisiana-Pacific Insiders?

While there has not been any insider buying in the last three months, there has been selling. But the sales were small, so we're not concerned. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Louisiana-Pacific insider transactions don't fill us with confidence. Of course, the future is what matters most. So if you are interested in Louisiana-Pacific, you should check out this free report on analyst forecasts for the company.

But note: Louisiana-Pacific may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.