We wouldn't blame Lincoln National Corporation (NYSE:LNC) shareholders if they were a little worried about the fact that James Reid, the Executive VP & President of Workplace Solutions recently netted about US$2.1m selling shares at an average price of US$39.26. Probably the most concerning element of the whole transaction is that the disposal amounted to 83% of their entire holding.
The Last 12 Months Of Insider Transactions At Lincoln National
Notably, that recent sale by James Reid is the biggest insider sale of Lincoln National shares that we've seen in the last year. That means that an insider was selling shares at slightly below the current price (US$42.77). 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was 83% of James Reid's holding.
In the last twelve months insiders purchased 2.30k shares for US$94k. But they sold 160.50k shares for US$6.1m. Over the last year we saw more insider selling of Lincoln National shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
View our latest analysis for Lincoln National
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).
Insider Ownership
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It appears that Lincoln National insiders own 0.5% of the company, worth about US$42m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Lincoln National Insiders?
Insiders sold Lincoln National shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. On the plus side, Lincoln National makes money, and is growing profits. While insiders do own shares, they don't own a heap, and they have been selling. We're in no rush to buy! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Lincoln National. Our analysis shows 2 warning signs for Lincoln National (1 shouldn't be ignored!) and we strongly recommend you look at these before investing.
But note: Lincoln National may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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 of direct interests only, but not derivative transactions or indirect interests.
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