Leading Edge Materials Insiders Got A Good Deal Selling At CA$0.28

While Leading Edge Materials Corp. (CVE:LEM) shareholders have had a good week with the stock up 27%, insiders can’t say the same having sold stock over the past year. Had they waited, they might have been able to sell their stock at much higher prices and thereby received a better value on their investment.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At Leading Edge Materials

Over the last year, we can see that the biggest insider sale was by the Independent Director, Daniel Major, for CA$114k worth of shares, at about CA$0.28 per share. That means that even when the share price was below the current price of CA$0.31, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don’t know for sure what they think of the stock price. This single sale was just 39% of Daniel Major’s stake. The only individual insider seller over the last year was Daniel Major. Notably Daniel Major was also the biggest buyer, having purchased CA$12k worth of shares.

The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Check out our latest analysis for Leading Edge Materials

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Leading Edge Materials Insiders Are Selling The Stock

There was substantially more insider selling, than buying, of Leading Edge Materials shares over the last three months. In total, Independent Director Daniel Major sold CA$114k worth of shares in that time. Meanwhile Independent Director Daniel Major bought CA$12k worth , as we said above . Generally this level of net selling might be considered a bit bearish.

Insider Ownership Of Leading Edge Materials

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Leading Edge Materials insiders own about CA$26m worth of shares (which is 42% of the company). 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 Does This Data Suggest About Leading Edge Materials Insiders?

Unfortunately, there has been more insider selling of Leading Edge Materials stock, than buying, in the last three months. And our longer term analysis of insider transactions didn’t bring confidence, either. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn’t make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. For instance, we’ve identified 5 warning signs for Leading Edge Materials (3 are a bit concerning) you should be aware of.

Of course Leading Edge Materials may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.