We'd be surprised if Landsea Homes Corporation (NASDAQ:LSEA) shareholders haven't noticed that the Independent Director, Elias Farhat, recently sold US$419k worth of stock at US$11.91 per share. That sale was 10% of their holding, so it does make us raise an eyebrow.
Check out our latest analysis for Landsea Homes
Landsea Homes Insider Transactions Over The Last Year
The insider, Xuefeng Bao, made the biggest insider sale in the last 12 months. That single transaction was for US$41m worth of shares at a price of US$9.75 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$12.33. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was 87% of Xuefeng Bao's stake.
Over the last year, we can see that insiders have bought 60.00k shares worth US$450k. On the other hand they divested 4.26m shares, for US$42m. Over the last year we saw more insider selling of Landsea Homes shares, than buying. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insider Ownership Of Landsea Homes
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. Landsea Homes insiders own about US$23m worth of shares. That equates to 5.1% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Landsea Homes Tell Us?
An insider sold Landsea Homes shares recently, but they didn't buy any. Zooming out, the longer term picture doesn't give us much comfort. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 4 warning signs for Landsea Homes (of which 1 is significant!) you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.