Insiders Of Lee Enterprises Retain US$1.1m Of Investment Selling At Higher Prices

While it’s been a great week for Lee Enterprises, Incorporated (NASDAQ:LEE) shareholders after stock gained 10%, they should consider it with a grain of salt. The fact that insiders chose to dispose of US$1.1m worth of stock in the past 12 months even though prices were relatively low could be indicative of some anticipated weakness.

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.

See our latest analysis for Lee Enterprises

Lee Enterprises Insider Transactions Over The Last Year

The insider, Ritu Kapur, made the biggest insider sale in the last 12 months. That single transaction was for US$540k worth of shares at a price of US$15.00 each. That means that even when the share price was below the current price of US$18.90, an insider wanted to cash in some shares. 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. We note that the biggest single sale was 99% of Ritu Kapur's holding.

In total, Lee Enterprises insiders sold more than they bought over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

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Insiders At Lee Enterprises Have Sold Stock Recently

Over the last three months, we've seen notably more insider selling, than insider buying, at Lee Enterprises. We note insiders cashed in US$1.1m worth of shares. On the flip side, Independent Director Steven Fletcher spent US$9.4k on purchasing shares. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the company has been fully valued in recent months.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 13% of Lee Enterprises shares, worth about US$15m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Lee Enterprises Insider Transactions Indicate?

The insider sales have outweighed the insider buying, at Lee Enterprises, in the last three months. 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. So we'd only buy after careful consideration. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Lee Enterprises. To help with this, we've discovered 3 warning signs (2 are potentially serious!) that you ought to be aware of before buying any shares in Lee Enterprises.

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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.