LMP Automotive Holdings, Inc. (NASDAQ:LMPX) insiders need another US$626k to breakeven on a US$940k stock purchase even after recent gains

By
Simply Wall St
Published
March 17, 2022
NasdaqCM:LMPX
Source: Shutterstock

Insiders who bought US$940k worth of LMP Automotive Holdings, Inc. (NASDAQ:LMPX) stock in the last year recovered part of their losses as the stock rose by 18% last week. However, the purchase is proving to be an expensive wager as insiders are yet to get ahead of their losses which currently stand at US$626k since the time of purchase.

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 LMP Automotive Holdings

LMP Automotive Holdings Insider Transactions Over The Last Year

Notably, that recent sale by Chairman of the Board of Directors Samer Tawfik was not the only time they traded LMP Automotive Holdings shares this year. They previously purchased US$453k worth of shares at a price of US$16.10 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$4.61). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels. Notably Samer Tawfik was also the biggest seller.

In the last twelve months insiders purchased 68.08k shares for US$940k. But insiders sold 118.50k shares worth US$728k. In total, LMP Automotive Holdings insiders bought more than they sold over the last year. They paid about US$13.81 on average. This is nice to see since it implies that insiders might see value around current prices. 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!

insider-trading-volume
NasdaqCM:LMPX Insider Trading Volume March 17th 2022

LMP Automotive Holdings is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

LMP Automotive Holdings Insiders Are Selling The Stock

There was substantially more insider selling, than buying, of LMP Automotive Holdings shares over the last three months. In that time, insiders dumped US$728k worth of shares. Meanwhile insider Svetlana Limburger bought US$10k worth. The share price has moved a bit recently, but it's hard to argue that the selling is a positive.

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 appears that LMP Automotive Holdings insiders own 37% of the company, worth about US$19m. 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 LMP Automotive Holdings Insider Transactions Indicate?

The insider sales have outweighed the insider buying, at LMP Automotive Holdings, in the last three months. On the other hand, the insider transactions over the last year are encouraging. It's good to see insiders are shareholders. So we're not overly bothered by recent selling. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For instance, we've identified 5 warning signs for LMP Automotive Holdings (1 is a bit concerning) you should be aware of.

Of course LMP Automotive Holdings 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, but not derivative transactions.

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