LKQ Sees Insider Stock Selling

From what we can see, insiders were net sellers in LKQ Corporation's (NASDAQ:LKQ ) during the past 12 months. That is, insiders sold the stock in greater numbers than they purchased it.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At LKQ

Over the last year, we can see that the biggest insider sale was by the insider, Dominick Zarcone, for US$635k worth of shares, at about US$42.32 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$37.49. So it may not shed much light on insider confidence at current levels. Dominick Zarcone was the only individual insider to sell over the last year.

Over the last year, we can see that insiders have bought 17.81k shares worth US$701k. But insiders sold 55.00k shares worth US$2.2m. Dominick Zarcone sold a total of 55.00k shares over the year at an average price of US$40.70. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Check out our latest analysis for LKQ

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

LKQ Insiders Are Selling The Stock

Over the last three months, we've seen notably more insider selling, than insider buying, at LKQ. In total, insider Dominick Zarcone sold US$190k worth of shares in that time. On the other hand we note President Justin Jude bought US$100k worth of shares. Generally this level of net selling might be considered a bit bearish.

Does LKQ Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. 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 appears that LKQ insiders own 0.7% of the company, worth about US$66m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The LKQ Insider Transactions Indicate?

Unfortunately, there has been more insider selling of LKQ stock, than buying, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! While it's good to be aware of 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. You'd be interested to know, that we found 1 warning sign for LKQ and we suggest you have a look.

Of course LKQ may not be the best stock to buy. So you may wish to see this free collection of high quality 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.