We'd be surprised if Liquidity Services, Inc. (NASDAQ:LQDT) shareholders haven't noticed that the Co-Founder & Director, Jaime Mateus-Tique, recently sold US$239k worth of stock at US$34.52 per share. On the bright side, that sale was only 1.9% of their holding, so we doubt it's very meaningful, on its own.

The Last 12 Months Of Insider Transactions At Liquidity Services

In fact, the recent sale by Co-Founder & Director Jaime Mateus-Tique was not their only sale of Liquidity Services shares this year. Earlier in the year, they fetched US$33.20 per share in a -US$2.2m sale. That means that even when the share price was slightly below the current price of US$33.34, an insider wanted to cash in some shares. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 15% of Jaime Mateus-Tique's holding.

Liquidity Services insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, 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 small cap stocks that are not only being bought by insiders but also have attractive valuations.

Insider Ownership Of Liquidity Services

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Liquidity Services insiders own 25% of the company, currently worth about US$258m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Liquidity Services Insiders?

Insiders haven't bought Liquidity Services stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. But since Liquidity Services is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Liquidity Services. While conducting our analysis, we found that Liquidity Services has 1 warning sign and it would be unwise to ignore this.

But note: Liquidity Services 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.

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.