Those following along with Lemonade, Inc. (NYSE:LMND) will no doubt be intrigued by the recent purchase of shares by Maria Angelidou-Smith, Director of the company, who spent a stonking US$1.0m on stock at an average price of US$30.02. That purchase boosted their holding by 456%, which makes us wonder if the move was inspired by quietly confident deeply-felt optimism.

Check out our latest analysis for Lemonade

The Last 12 Months Of Insider Transactions At Lemonade

In fact, the recent purchase by Maria Angelidou-Smith was the biggest purchase of Lemonade shares made by an insider individual in the last twelve months, according to our records. That implies that an insider found the current price of US$33.30 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Lemonade share holders is that insiders were buying at near the current price.

Happily, we note that in the last year insiders paid US$1.5m for 63.55k shares. But insiders sold 13.41k shares worth US$231k. In the last twelve months there was more buying than selling by Lemonade insiders. The average buy price was around US$23.25. To my mind it is good that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Does Lemonade 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Lemonade insiders own 5.7% of the company, worth about US$129m. 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 Lemonade Tell Us?

It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Lemonade. Nice! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 3 warning signs for Lemonade and we suggest you have a look.

Of course Lemonade 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.

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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.