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Investors who take an interest in LMP Automotive Holdings, Inc. (NASDAQ:LMPX) should definitely note that the Chairman, Samer Tawfik, recently paid US$17.52 per share to buy US$193k worth of the stock. However, it only increased shareholding by a small percentage, and it wasn’t a huge purchase by absolute value, either.
See our latest analysis for LMP Automotive Holdings
The Last 12 Months Of Insider Transactions At LMP Automotive Holdings
Notably, that recent purchase by Chairman Samer Tawfik was not the only time they bought LMP Automotive Holdings shares this year. Earlier in the year, they paid US$5.00 per share in a US$2.8m purchase. Even though the purchase was made at a significantly lower price than the recent price (US$19.98), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn’t tell us much about what they think of current prices.
LMP Automotive Holdings insiders may have bought shares in the last year, but they didn’t sell any. Their average price was about US$6.47. To my mind it is good that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today’s levels. 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!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Does LMP Automotive Holdings Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It’s great to see that LMP Automotive Holdings insiders own 41% of the company, worth about US$80m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At LMP Automotive Holdings Tell Us?
It’s certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest LMP Automotive Holdings insiders are well aligned, and quite possibly think the share price is too low. Nice! In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing LMP Automotive Holdings. Case in point: We’ve spotted 3 warning signs for LMP Automotive Holdings you should be aware of, and 2 of them are a bit concerning.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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, but not derivative transactions.
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. 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.
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