Should you be reassured about insider trading at LC-Tec Holding AB (NGM: LCT)?


It is not uncommon to see companies perform well in the years following an insider purchase of shares. The flip side is that there are more than a few examples of insiders giving up their stocks before a period of poor performance. We will therefore examine whether insiders have bought or sold shares of LC-Tec Holding AB (NGM: LCT).

Are Insider Trading Important?

It is quite normal to see company insiders, such as board members, trading company shares from time to time. However, these insiders should disclose their trading activities and not trade on the basis of inside information.

We don’t believe shareholders should just follow insider trading. But logic dictates that you pay attention to whether insiders are buying or selling stocks. For example, a Harvard university to study found that “insider buying generates abnormal returns of over 6% per year”.

Discover our latest analysis for LC-Tec Holding

LC-Tec holds insider trading for the past year

There hasn’t been a very large single trade in the past year, but we can still see some trade.

Below you can see a visual representation of insider trading (by businesses and individuals) over the past 12 months. If you click on the chart, you can see all of the individual trades including the stock price, individual and date!

NGM: LCT Insider Trading Volume July 27, 2021

LC-Tec Holding is not the only one to buy. So take a look at this free list of growing companies with insider buying.

Insider ownership

For an ordinary shareholder, it is worth checking out how many shares are owned by company insiders. I think it’s a good sign if the insiders own a significant number of shares in the company. Insiders hold 25% of the shares of LC-Tec Holding, worth around SEK 7.7 million. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest an alignment between insiders and other shareholders.

So what do LC-Tec Holding’s insider trading indicate?

We certainly don’t mind the fact that there hasn’t been any LC-Tec Holding insider trading recently. However, our analysis of transactions over the past year is encouraging. Insiders own shares in LC-Tec Holding and we see no evidence to suggest that they are worried about the future. So, while it is useful to know what insiders are doing in terms of buying or selling, it is also useful to know the risks that a particular company faces. To this end, you should inquire about the 5 warning signs we spotted with LC-Tec Holding (including 3 which are a little unpleasant).

If you would rather consult with another company – one with potentially superior finances – then don’t miss this free list of interesting companies, which have a HIGH return on equity and low leverage.

For the purposes of this article, insiders are the persons who report their transactions to the relevant regulatory body. We currently account for open market transactions and private assignments, but not derivative transactions.

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This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.
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