Lumentum Holdings Insiders Benefit From Selling Stock At US$49.23

Although Lumentum Holdings Inc. (NASDAQ:LITE) shareholders have enjoyed a great week with the stock up 28%, insiders who sold stock over the past year haven't fared as well. Had they waited, they might have been able to sell their stock at much higher prices and thereby received a better value on their investment.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Lumentum Holdings

Lumentum Holdings Insider Transactions Over The Last Year

The VP of Finance, Matthew Sepe, made the biggest insider sale in the last 12 months. That single transaction was for US$488k worth of shares at a price of US$49.23 each. That means that an insider was selling shares at slightly below the current price (US$83.85). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 23% of Matthew Sepe's stake. The only individual insider seller over the last year was Matthew Sepe.

The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

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).

Does Lumentum Holdings 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. We usually like to see fairly high levels of insider ownership. Lumentum Holdings insiders own about US$46m worth of shares. That equates to 0.8% of the company. 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 Does This Data Suggest About Lumentum Holdings Insiders?

The fact that there have been no Lumentum Holdings insider transactions recently certainly doesn't bother us. Our analysis of Lumentum Holdings insider transactions leaves us cautious. But we do like the fact that insiders own a fair chunk of the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Lumentum Holdings. Case in point: We've spotted 2 warning signs for Lumentum Holdings you should be aware of, and 1 of these makes us a bit uncomfortable.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.