Don't Ignore The Insider Selling In Lemonade
Some Lemonade, Inc. (NYSE:LMND) shareholders may be a little concerned to see that the Chief Insurance Officer, John Peters, recently sold a substantial US$578k worth of stock at a price of US$52.55 per share. That sale reduced their total holding by 16% which is hardly insignificant, but far from the worst we've seen.
The Last 12 Months Of Insider Transactions At Lemonade
The CFO, Principal Accounting Officer & Treasurer, Timothy Bixby, made the biggest insider sale in the last 12 months. That single transaction was for US$2.3m worth of shares at a price of US$75.51 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of US$50.12. So it may not shed much light on insider confidence at current levels.
In total, Lemonade insiders sold more than they bought over 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!
See our latest analysis for Lemonade
I will like Lemonade better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
Does Lemonade Boast High Insider Ownership?
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. It's great to see that Lemonade insiders own 5.3% of the company, worth about US$205m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Lemonade Insider Transactions Indicate?
Insiders haven't bought Lemonade stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. Every company has risks, and we've spotted 1 warning sign for Lemonade you should know about.
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.