Over the past year, insiders sold US$1.8m worth of Liquidity Services, Inc. (NASDAQ:LQDT) stock at an average price of US$19.46 per share allowing them to get the most out of their money. After the stock price dropped 8.0% last week, the company's market value declined by US$51m, but insiders were able to mitigate their losses.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Liquidity Services

Liquidity Services Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Chief Technology Officer, Steven Weiskircher, for US$516k worth of shares, at about US$22.20 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$16.40. So it is hard to draw any strong conclusion from it.

Insiders in Liquidity Services didn't buy any shares in the last year. 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 are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insiders At Liquidity Services Have Sold Stock Recently

The last quarter saw substantial insider selling of Liquidity Services shares. Specifically, insiders ditched US$1.2m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership Of Liquidity Services

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Liquidity Services insiders own 24% of the company, currently worth about US$138m 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 Liquidity Services Tell Us?

Insiders haven't bought Liquidity Services stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. On the plus side, Liquidity Services makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. When we did our research, we found 3 warning signs for Liquidity Services (2 are a bit unpleasant!) that we believe deserve your full attention.

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, 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.