In the last year, multiple insiders have substantially increased their holdings of Liberty Latin America Ltd. (NASDAQ:LILA) stock, indicating that insiders' optimism about the company's prospects has increased.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Liberty Latin America

Liberty Latin America Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Independent Director Brendan Paddick for US$3.6m worth of shares, at about US$9.10 per share. So it's clear an insider wanted to buy, at around the current price, which is US$9.38. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. In this case we're pleased to report that the insider purchases were made at close to current prices.

Over the last year, we can see that insiders have bought 791.31k shares worth US$6.7m. But insiders sold 15.17k shares worth US$119k. Overall, Liberty Latin America insiders were net buyers during the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

Liberty Latin America is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insiders At Liberty Latin America Have Bought Stock Recently

At Liberty Latin America,over the last quarter, we have observed quite a lot more insider buying than insider selling. Independent Director Brendan Paddick spent US$5.4m on stock. But Chief Accounting Officer Brian Zook sold shares worth US$57k. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.

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. 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 Liberty Latin America insiders own 11% of the company, worth about US$194m. 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 Liberty Latin America Tell Us?

The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Liberty Latin America. Nice! Of course, the future is what matters most. So if you are interested in Liberty Latin America, you should check out this free report on analyst forecasts for the company.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.

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.