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It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Liquidity Services, Inc. (NASDAQ:LQDT).
What Is Insider Buying?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
The Last 12 Months Of Insider Transactions At Liquidity Services
Over the last year, we can see that the biggest insider sale was by the Executive VP & CFO, Jorge Celaya, for US$422k worth of shares, at about US$7.05 per share. So what is clear is that an insider saw fit to sell at around the current price of US$6.06. While we don’t usually like to see insider selling, it’s more concerning if the sales take price at a lower price. In this case, the big sale took place at around the current price, so it’s not too bad (but it’s still not a positive).
Over the last year, we note insiders sold 122k shares worth US$812k. Liquidity Services insiders didn’t buy any shares over the last year. You can see a visual depiction of insider transactions (by 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!
Insiders at Liquidity Services Have Sold Stock Recently
We have seen a bit of insider selling at Liquidity Services, over the last three months. James Rallo 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 Liquidity Services
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Insiders own 19% of Liquidity Services shares, worth about US$40m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Liquidity Services Insiders?
Our data shows a little more insider selling, but no insider buying, in the last three months. But the sales were small, so we’re not concerned. Recent sales exacerbate our caution arising from analysis of Liquidity Services insider transactions. But we do like the fact that insiders own a fair chunk of the company. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Liquidity Services.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.
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If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.