Yahoo Finance Insiders may be rethinking their CA$2.2m LifeSpeak Inc. (TSE:LSPK) investment now that the company has lost CA$13m in value
Insiders who bought CA$2.2m worth of LifeSpeak Inc.'s (TSE:LSPK) stock at an average buy price of CA$2.37 over the last year may be disappointed by the recent 10% decrease in the stock. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth CA$2.1m, which is not what they expected.
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.
See our latest analysis for LifeSpeak
LifeSpeak Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Founder Michael Held for CA$292k worth of shares, at about CA$7.60 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$2.23). 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. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
Over the last year, we can see that insiders have bought 923.25k shares worth CA$2.2m. But insiders sold 164.60k shares worth CA$262k. Overall, LifeSpeak insiders were net buyers during the last year. The average buy price was around CA$2.37. I'd consider this a positive as it suggests insiders see value at around the current price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
LifeSpeak is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. LifeSpeak insiders own about CA$41m worth of shares. That equates to 36% of the company. 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 Do The LifeSpeak Insider Transactions Indicate?
It doesn't really mean much that no insider has traded LifeSpeak shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in LifeSpeak and their transactions don't cause us concern. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 4 warning signs with LifeSpeak and understanding these should be part of your investment process.
Of course LifeSpeak 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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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.
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