Anyone interested in The Lovesac Company (NASDAQ:LOVE) should probably be aware that the Founder, Shawn Nelson, recently divested US$271k worth of shares in the company, at an average price of US$33.89 each. On the bright side, that sale was only 3.5% of their holding, so we doubt it’s very meaningful, on its own.
Check out our latest analysis for Lovesac
The Last 12 Months Of Insider Transactions At Lovesac
Notably, that recent sale by Founder Shawn Nelson was not the only time they sold Lovesac shares this year. Earlier in the year, they fetched US$49.43 per share in a -US$346k sale. While we don’t usually like to see insider selling, it’s more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of US$35.03. So it may not tell us anything about how insiders feel about the current share price.
Over the last year we saw more insider selling of Lovesac shares, than buying. 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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Does Lovesac Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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. Lovesac insiders own about US$23m worth of shares. That equates to 4.4% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Lovesac Insider Transactions Indicate?
An insider sold Lovesac shares recently, but they didn’t buy any. And our longer term analysis of insider transactions didn’t bring confidence, either. But it is good to see that Lovesac is growing earnings. Insider ownership isn’t particularly high, so this analysis makes us cautious about the company. We’re in no rush to buy! So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. Case in point: We’ve spotted 2 warning signs for Lovesac you should be aware of, and 1 of them is potentially serious.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, but not derivative transactions.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.