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Insiders who bought US$6.79m worth of Liberty Latin America Ltd.'s (NASDAQ:LILA) stock at an average buy price of US$8.49 over the last year may be disappointed by the recent 16% decrease in the stock. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only US$3.60m.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
Liberty Latin America Insider Transactions Over The Last Year
The Independent Director Brendan Paddick made the biggest insider purchase in the last 12 months. That single transaction was for US$3.6m worth of shares at a price of US$9.10 each. That means that an insider was happy to buy shares at above the current price of US$4.50. 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. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. The only individual insider to buy over the last year was Brendan Paddick.
Brendan Paddick bought 799.55k shares over the last 12 months at an average price of US$8.49. 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!
Check out our latest analysis for Liberty Latin America
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
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. Liberty Latin America insiders own 11% of the company, currently worth about US$104m 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.
So What Does This Data Suggest About Liberty Latin America Insiders?
It doesn't really mean much that no insider has traded Liberty Latin America shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. With high insider ownership and encouraging transactions, it seems like Liberty Latin America insiders think the business has merit. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.