With LondonMetric Property Plc (LON:LMP) down 8.3% this week, insiders may find some solace after selling £3.3m worth of shares earlier in the year.

Insiders appear to have made the most of their holdings by selling £3.3million LondonMetric Property Plc (LON:LMP) shares at an average selling price of £2.46 over the past year. The company’s market cap plunged £144 million after the price fell 8.3% last week, but insiders have been able to limit their loss to some extent.

While we don’t believe that shareholders should simply track insider transactions, we would think it foolish to ignore insider transactions entirely.

Our analysis indicates this LMP is potentially undervalued!

The last 12 months of insider transactions at LondonMetric Property

In the last 12 months, the largest single sale by an insider was the sale of £1.1m of shares at £2.71 per share by co-founder and non-executive chairman Patrick Vaughan. While insider selling is negative, it is even more negative for us when the shares are sold at a lower price. It is some consolation that this sale was completed at a price well in excess of the current share price of £1.63. It is therefore difficult to draw clear conclusions from this.

We are pleased to note that insiders paid £246,000 for 125,000 shares last year. On the other hand, they sold 1.34 million shares for £3.3 million. All in all, insiders have sold more shares of LondonMetric Property than they have bought in the last year. Sellers received an average price of around UK£2.46. It’s certainly not nice to see insiders selling shares in the company. However, we note that the average selling price was significantly higher than the current share price (which is £1.63). The chart below shows insider transactions (of companies and individuals) over the last year. By clicking on the graphic below you can see the exact details of each insider transaction!

LSE:LMP insider trading volume as of October 12, 2022

I’ll like LondonMetric Property better when I see some big insider buys. While we wait, take a look at this free List of growing companies with significant recent insider purchases.

LondonMetric property insiders recently bought shares

It’s good to see that LondonMetric Property insiders have made notable investments in the company’s shares. Independent non-executive director James Dean spent £128,000 on shares and there were no sales. This could be interpreted as a positive outlook.

Insider Property

Many investors like to check how much of a company is owned by insiders. Typically, the higher the insider ownership, the more likely it is that insiders will be incentivized to build the company over the long term. Insiders own 2.7% of LondonMetric Property shares, worth around £44m. While that’s a strong but not stellar level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.

So what does this data say about LondonMetric Property Insiders?

The recent insider buy is encouraging. On the other hand, the transaction history in the last year is not so positive. While recent transactions signal confidence in LondonMetric Property, insiders don’t own enough of the company to overcome our caution about longer-term deals. Overall they appear to be reasonably aligned. In addition to being aware of ongoing insider transactions, it is beneficial to identify the risks LondonMetric Property faces. For example, we have identified 3 warning signs for LondonMetric Property (2 can not be ignored) you should note.

Of course LondonMetric Property might not be the best stock to buy. You might want to see this free Collection of high quality companies.

For the purposes of this article, insiders are individuals who report their transactions to the relevant regulator. We currently account for open market transactions and private dispositions, but not derivatives transactions.

This Simply Wall St article is of a general nature. We provide comments based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your goals or financial situation. Our goal is to offer you long-term focused analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned.

The assessment is complex, but we help to simplify it.

find out if LondonMetric property may be over or under priced by reviewing our comprehensive analysis which includes the following Fair Value Estimates, Risks and Warnings, Dividends, Insider Trading and Financial Health.

Check out the free analysis

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