Insiders who acquired US$214.4k worth of Lument Finance Trust, Inc.'s (NYSE:LFT) stock at an average price of US$1.47 in the past 12 months may be dismayed by the recent 14% price decline. 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$117.7k which is not ideal.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Lument Finance Trust Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when CEO & Chairman of the Board James Flynn bought US$88k worth of shares at a price of US$1.60 per share. That means that an insider was happy to buy shares at above the current price of US$0.81. 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. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

In the last twelve months Lument Finance Trust insiders were buying shares, but not selling. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Lument Finance Trust is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Lument Finance Trust Insiders Bought Stock Recently

We saw some Lument Finance Trust insider buying shares in the last three months. Independent Lead Director William Houlihan purchased US$23k worth of shares in that period. It's great to see that insiders are only buying, not selling. However, in this case the amount invested recently is quite small.

Does Lument Finance Trust Boast High 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Based on our data, Lument Finance Trust insiders have about 3.4% of the stock, worth approximately US$1.5m. But they may have an indirect interest through a corporate structure that we haven't picked up on. We consider this fairly low insider ownership.

What Might The Insider Transactions At Lument Finance Trust Tell Us?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. That said, the purchases were not large. But insiders have shown more of an appetite for the stock, over the last year. We'd like to see bigger individual holdings. However, we don't see anything to make us think Lument Finance Trust insiders are doubting the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Lument Finance Trust. At Simply Wall St, we've found that Lument Finance Trust has 3 warning signs (1 is potentially serious!) that deserve your attention before going any further with your analysis.

Of course Lument Finance Trust may not be the best stock to buy. So you may wish to see this free collection of high quality 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 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.