We wouldn't blame LGI Homes, Inc. (NASDAQ:LGIH) shareholders if they were a little worried about the fact that Michael Snider, the President & COO recently netted about US$656k selling shares at an average price of US$112. However, that sale only accounted for 2.8% of their holding, so arguably it doesn't say much about their conviction.
The Last 12 Months Of Insider Transactions At LGI Homes
In fact, the recent sale by Michael Snider was the biggest sale of LGI Homes shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was slightly below the current price of US$113, an insider wanted to cash in some shares. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 2.8% of Michael Snider's stake.
In the last year LGI Homes insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like LGI Homes better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insider Ownership Of LGI Homes
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. LGI Homes insiders own about US$341m worth of shares (which is 13% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The LGI Homes Insider Transactions Indicate?
Insiders sold LGI Homes shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing LGI Homes. When we did our research, we found 3 warning signs for LGI Homes (1 is significant!) that we believe deserve your full attention.
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 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.