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As LendingClub Corporation (NYSE:LC) drops to US$977m market cap, insiders might rethink their US$641k stock purchase earlier this year

Insiders who bought US$641k worth of LendingClub Corporation's (NYSE:LC) stock at an average buy price of US$11.79 over the last year may be disappointed by the recent 11% decrease in the stock. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth US$499k which is not ideal.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for LendingClub

LendingClub Insider Transactions Over The Last Year

The Independent Director Michael Zeisser made the biggest insider purchase in the last 12 months. That single transaction was for US$232k worth of shares at a price of US$16.19 each. That means that an insider was happy to buy shares at above the current price of US$9.17. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months LendingClub insiders were buying shares, but not selling. The average buy price was around US$11.79. These transactions suggest that insiders have considered the current price attractive. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
insider-trading-volume

LendingClub is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

LendingClub Insiders Bought Stock Recently

It's good to see that LendingClub insiders have made notable investments in the company's shares. Overall, two insiders shelled out US$359k for shares in the company -- and none sold. This could be interpreted as suggesting a positive outlook.

Insider Ownership Of LendingClub

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that LendingClub insiders own 2.5% of the company, worth about US$24m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At LendingClub Tell Us?

It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest LendingClub insiders are well aligned, and that they may think the share price is too low. 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. When we did our research, we found 2 warning signs for LendingClub (1 doesn't sit too well with us!) that we believe deserve your full attention.

But note: LendingClub 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, but not derivative transactions.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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