Lowe's Companies Insiders Sell US$1.6m Of Stock, Possibly Signalling Caution

In the last year, many Lowe's Companies, Inc. (NYSE:LOW) insiders sold a substantial stake in the company which may have sparked shareholders' attention. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, if numerous insiders are selling, shareholders should investigate more.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Lowe's Companies

The Last 12 Months Of Insider Transactions At Lowe's Companies

The Executive Vice President of Stores, Joseph McFarland, made the biggest insider sale in the last 12 months. That single transaction was for US$1.1m worth of shares at a price of US$271 each. That means that an insider was selling shares at around the current price of US$247. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

All up, insiders sold more shares in Lowe's Companies than they bought, over the last year. 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!

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Lowe's Companies Insiders Bought Stock Recently

It's good to see that Lowe's Companies insiders have made notable investments in the company's shares. We can see that Independent Director Lawrence R. Simkins paid US$246k for shares in the company. No-one sold. This is a positive in our book as it implies some confidence.

Does Lowe's Companies Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Lowe's Companies insiders own 0.1% of the company, currently worth about US$141m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Lowe's Companies Tell Us?

It is good to see the recent insider purchase. However, the longer term transactions are not so encouraging. The high levels of insider ownership, and the recent buying by an insider suggests they are well aligned and optimistic. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Lowe's Companies. At Simply Wall St, we've found that Lowe's Companies has 2 warning signs (1 is potentially serious!) that deserve your attention before going any further with your analysis.

Of course Lowe's Companies 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.