We wouldn't blame Lifeway Foods, Inc. (NASDAQ:LWAY) shareholders if they were a little worried about the fact that Ludmila Smolyansky, a company insider, recently netted about US$507k selling shares at an average price of US$11.65. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 3.1%.
Lifeway Foods Insider Transactions Over The Last Year
Notably, that recent sale by insider Ludmila Smolyansky was not the only time they sold Lifeway Foods shares this year. Earlier in the year, they fetched US$6.00 per share in a -US$750k sale. So it's clear an insider wanted to take some cash off the table, even below the current price of US$11.37. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. 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. It is worth noting that this sale was only 6.9% of Ludmila Smolyansky's holding.
In the last year Lifeway Foods insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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Insider Ownership Of Lifeway Foods
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. Lifeway Foods insiders own about US$72m worth of shares (which is 43% of the company). 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 Lifeway Foods Insiders?
Insiders sold Lifeway Foods shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. But since Lifeway Foods is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Lifeway Foods. Every company has risks, and we've spotted 2 warning signs for Lifeway Foods you should know about.
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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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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.
