Selling Local Bounti Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders

Local Bounti Corporation's (NYSE:LOCL) stock price has dropped 13% in the previous week, but insiders who sold US$628k in stock over the past year have had less luck. Insiders would probably have been better off holding on to their shares given that the average selling price of US$1.17 is still lower than the current share price.

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

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The Last 12 Months Of Insider Transactions At Local Bounti

In the last twelve months, the biggest single sale by an insider was when the CEO, President & Director, Kathleen Valiasek, sold US$232k worth of shares at a price of US$1.16 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$0.80). So it may not shed much light on insider confidence at current levels.

Insiders in Local Bounti didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

Check out our latest analysis for Local Bounti

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Insiders At Local Bounti Have Sold Stock Recently

The last quarter saw substantial insider selling of Local Bounti shares. In total, CEO, President & Director Kathleen Valiasek dumped US$126k 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

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Local Bounti insiders own 97% of the company, worth about US$20m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Local Bounti Tell Us?

An insider sold Local Bounti shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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. Be aware that Local Bounti is showing 5 warning signs in our investment analysis, and 2 of those are a bit unpleasant...

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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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