Largo Drops To CA$0.88, Yet Insiders May Have Sold Too Early
Despite the fact that Largo Inc.'s (TSE:LGO) value has dropped 15% in the last week insiders who sold US$354k worth of stock in the past 12 months have had less success. The average selling price of US$1.33 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
The Last 12 Months Of Insider Transactions At Largo
The insider Gordon Babcock made the biggest insider purchase in the last 12 months. That single transaction was for CA$117k worth of shares at a price of CA$1.38 each. That means that an insider was happy to buy shares at above the current price of CA$0.88. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. 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 98.70k shares worth CA$136k. But insiders sold 267.28k shares worth CA$354k. In total, Largo insiders sold more than they bought over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
See our latest analysis for Largo
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Insiders At Largo Have Sold Stock Recently
Over the last three months, we've seen significant insider selling at Largo. In total, insiders sold CA$254k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
Does Largo Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. From what we can see in our data, insiders own only about CA$406k worth of Largo shares. It's always possible we are missing something but from our data, it looks like insider ownership is minimal.
So What Does This Data Suggest About Largo Insiders?
Insiders haven't bought Largo stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. Insiders own relatively few shares in the company, and when you consider the sales, we're not particularly excited about the stock. So we're not rushing to buy, to say the least. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Be aware that Largo is showing 5 warning signs in our investment analysis, and 2 of those are potentially serious...
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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.