Over the past year, insiders sold US$4.2m worth of Lennox International Inc. (NYSE:LII) stock at an average price of US$340 per share allowing them to get the most out of their money. After the stock price dropped 3.8% last week, the company's market value declined by US$401m, but insiders were able to mitigate their losses.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Lennox International
Over the last year, we can see that the biggest insider sale was by the Chairman & CEO, Todd Bluedorn, for US$2.8m worth of shares, at about US$345 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$280). So it may not tell us anything about how insiders feel about the current share price.
In the last year Lennox International insiders didn't buy any company stock. You can see the insider transactions (by companies and 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!
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Lennox International Insiders Are Selling The Stock
The last three months saw significant insider selling at Lennox International. In total, Independent Lead Director Todd Teske dumped US$192k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership of Lennox International
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Lennox International insiders own 3.4% of the company, currently worth about US$352m based on the recent share price. 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 Do The Lennox International Insider Transactions Indicate?
An insider sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. On the plus side, Lennox International makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example - Lennox International has 2 warning signs we think you should be aware of.
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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.
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