Last week, Light & Wonder, Inc. (NASDAQ:LNW) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 3.6% last week, resulting in a US$216m increase in the company's market worth. Put another way, the original US$1.8m acquisition is now worth US$2.1m.
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.
Check out our latest analysis for Light & Wonder
The Last 12 Months Of Insider Transactions At Light & Wonder
Over the last year, we can see that the biggest insider sale was by the Independent Director, Michael Regan, for US$1.3m worth of shares, at about US$64.80 per share. That means that an insider was selling shares at slightly below the current price (US$67.01). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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. It is worth noting that this sale was only 21% of Michael Regan's holding. The only individual insider seller over the last year was Michael Regan.
Hamish McLennan bought 31.25k shares over the last 12 months at an average price of US$57.09. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Light & Wonder is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders At Light & Wonder Have Sold Stock Recently
The last quarter saw substantial insider selling of Light & Wonder shares. Specifically, Independent Director Michael Regan ditched US$1.3m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
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. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Light & Wonder insiders own 0.9% of the company, worth about US$56m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Light & Wonder Insiders?
An insider sold Light & Wonder shares recently, but they didn't buy any. In contrast, they appear keener if you look at the last twelve months. It's good to see insiders are shareholders. So the recent selling doesn't worry us too much. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Light & Wonder. Case in point: We've spotted 2 warning signs for Light & Wonder you should be aware of, and 1 of them 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, but not derivative transactions.
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