Some Lumentum Holdings Inc. (NASDAQ:LITE) shareholders may be a little concerned to see that the Senior VP, Jae Kim, recently sold a substantial US$1.6m worth of stock at a price of US$828 per share. However, that sale only accounted for 8.3% of their holding, so arguably it doesn't say much about their conviction.

Lumentum Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Independent Director, Ian Small, sold US$4.3m worth of shares at a price of US$868 per share. So what is clear is that an insider saw fit to sell at around the current price of US$867. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

In the last year Lumentum Holdings insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

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Does Lumentum Holdings 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. It's great to see that Lumentum Holdings insiders own 0.7% of the company, worth about US$507m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Lumentum Holdings Tell Us?

An insider sold Lumentum Holdings shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. 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. 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.

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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.