It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in LPL Financial Holdings Inc. (NASDAQ:LPLA).

What Is Insider Buying?

It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’

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Check out our latest analysis for LPL Financial Holdings

The Last 12 Months Of Insider Transactions At LPL Financial Holdings

In the last twelve months, the biggest single sale by an insider was when the MD & Chief Risk Officer, Tracy Calder, sold US$831k worth of shares at a price of US$77.34 per share. So it’s clear an insider wanted to take some cash off the table, even below the current price of US$80.82. 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 63.2% of Tracy Calder’s stake. Tracy Calder was the only individual insider to sell over the last year.

Tracy Calder divested 11247 shares over the last 12 months at an average price of US$77.65. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like LPL Financial Holdings better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership of LPL Financial Holdings

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. It appears that LPL Financial Holdings insiders own 0.8% of the company, worth about US$56m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About LPL Financial Holdings Insiders?

An insider sold LPL Financial Holdings shares recently, but they didn’t buy any. And there weren’t any purchases to give us comfort, over the last year. But it is good to see that LPL Financial Holdings is growing earnings. While insiders do own shares, they don’t own a heap, and they have been selling. We’d think twice before buying! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for LPL Financial Holdings.

Of course LPL Financial Holdings may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.



If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.