MD of Lycopodium Minerals APAC & Executive Director Of Lycopodium Sold 100% Of Their Shares
Lycopodium Limited's MD, Karl Cicanese, sold 100% of his shares for AU$2.6m at an average price of AU$12.75, raising concerns among shareholders. Insider selling has been more prevalent than buying over the past year, with Executive Director Bruno Ruggiero selling AU$6.8m worth of shares. Despite insiders owning 35% of the company, the lack of recent insider purchases and significant selling raises doubts about the company's valuation and future prospects. Investors are advised to consider the risks associated with Lycopodium before making investment decisions.
We wouldn't blame Lycopodium Limited (ASX:LYL) shareholders if they were a little worried about the fact that Karl Cicanese, the MD of Lycopodium Minerals APAC & Executive Director recently netted about AU$2.6m selling shares at an average price of AU$12.75. That diminished their holding by a very significant 100%, which arguably implies a strong desire to reallocate capital.
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Lycopodium Insider Transactions Over The Last Year
The Executive Director, Bruno Ruggiero, made the biggest insider sale in the last 12 months. That single transaction was for AU$6.8m worth of shares at a price of AU$10.39 each. That means that an insider was selling shares at slightly below the current price (AU$12.85). 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. 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 just 39% of Bruno Ruggiero's stake.
Over the last year we saw more insider selling of Lycopodium shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
See our latest analysis for Lycopodium
I will like Lycopodium better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
Does Lycopodium Boast High Insider Ownership?
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. Lycopodium insiders own about AU$174m worth of shares (which is 35% 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 Lycopodium Insiders?
An insider hasn't bought Lycopodium stock in the last three months, but there was some selling. 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. In terms of investment risks, we've identified 1 warning sign with Lycopodium and understanding it should be part of your investment process.
Of course Lycopodium 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.
