A Eli Lilly and Company (NYSE:LLY) insider lowered their holding by 28% earlier this year

By
Simply Wall St
Published
March 15, 2022
NYSE:LLY
Source: Shutterstock

Looking at Eli Lilly and Company's (NYSE:LLY ) insider transactions over the last year, we can see that insiders were net sellers. That is, there were more number of shares sold by insiders than there were purchased.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Eli Lilly

The Last 12 Months Of Insider Transactions At Eli Lilly

In the last twelve months, the biggest single sale by an insider was when the Chief Accounting Officer & VP of Finance, Donald Zakrowski, sold US$544k worth of shares at a price of US$181 per share. That means that an insider was selling shares at slightly below the current price (US$269). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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. It is worth noting that this sale was only 28% of Donald Zakrowski's holding. Donald Zakrowski was the only individual insider to sell over the last year.

Over the last year, we can see that insiders have bought 1.57k shares worth US$300k. But insiders sold 3.00k shares worth US$544k. 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!

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NYSE:LLY Insider Trading Volume March 15th 2022

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insiders at Eli Lilly Have Bought Stock Recently

There was some insider buying at Eli Lilly over the last quarter. Independent Director Marschall Runge purchased US$50k worth of shares in that period. We like it when there are only buyers, and no sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Does Eli Lilly Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Eli Lilly insiders own 0.2% of the company, worth about US$399m. 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 Eli Lilly Insider Transactions Indicate?

Our data shows a little insider buying, but no selling, in the last three months. Overall the buying isn't worth writing home about. While we gain confidence from high insider ownership of Eli Lilly, we can't say the same about their transactions in the last year, in the absence of further purchases. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we've identified 2 warning signs with Eli Lilly and understanding these should be part of your investment process.

But note: Eli Lilly 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, but not derivative transactions.

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