Yahoo Finance Having purchased AU$2.9m worth of Lark Distilling Co. Ltd (ASX:LRK) stock, the recent 15% pullback is not what insiders may have expected
Insiders who bought AU$2.9m worth of Lark Distilling Co. Ltd's (ASX:LRK) stock at an average buy price of AU$5.00 over the last year may be disappointed by the recent 15% decrease in the stock. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only AU$1.7m.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
View our latest analysis for Lark Distilling
The Last 12 Months Of Insider Transactions At Lark Distilling
In the last twelve months, the biggest single purchase by an insider was when insider Geoff Bainbridge bought AU$2.9m worth of shares at a price of AU$5.00 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$3.03). Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. The only individual insider to buy over the last year was Geoff Bainbridge.
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!
Lark Distilling 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.
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Lark Distilling insiders own 32% of the company, worth about AU$73m. 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 Lark Distilling Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Lark Distilling shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Lark Distilling 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. To help with this, we've discovered 3 warning signs (1 is significant!) that you ought to be aware of before buying any shares in Lark Distilling.
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. We currently account for open market transactions and private dispositions, but not derivative transactions.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
