While Latham Group, Inc. (NASDAQ:SWIM) shareholders have enjoyed a good week with stock up 18%, they need remain vigilant. Even though stock prices were relatively low, insiders elected to sell US$598k worth of stock in the last year, which could indicate some expected downturn.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for Latham Group
The Last 12 Months Of Insider Transactions At Latham Group
The Chief Human Resources Officer, Melissa Feck, made the biggest insider sale in the last 12 months. That single transaction was for US$406k worth of shares at a price of US$4.19 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$2.90. So it may not shed much light on insider confidence at current levels.
Happily, we note that in the last year insiders paid US$303k for 83.00k shares. On the other hand they divested 151.95k shares, for US$598k. Over the last year we saw more insider selling of Latham Group shares, than buying. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like Latham Group better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Does Latham Group Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Latham Group insiders own 8.3% of the company, worth about US$25m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Latham Group Tell Us?
It doesn't really mean much that no insider has traded Latham Group shares in the last quarter. Still, the insider transactions at Latham Group in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some comfort. 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. At Simply Wall St, we found 1 warning sign for Latham Group that deserve your attention before buying any shares.
But note: Latham Group may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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 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.