Over the past year, many LPL Financial Holdings Inc. (NASDAQ:LPLA) insiders sold a significant stake in the company which may have piqued investors' interest. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

LPL Financial Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the MD and Chief Technology & Information Officer, Greg Gates, sold US$3.0m worth of shares at a price of US$268 per share. That means that even when the share price was below the current price of US$332, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 46% of Greg Gates's holding.

In the last year LPL Financial Holdings insiders didn't buy any company stock. 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

LPL Financial Holdings Insiders Are Selling The Stock

The last three months saw significant insider selling at LPL Financial Holdings. Specifically, Managing Director of LPL Services Group Aneri Jambusaria ditched US$101k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership Of LPL Financial Holdings

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. LPL Financial Holdings insiders own 0.7% of the company, currently worth about US$173m 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 Do The LPL Financial Holdings Insider Transactions Indicate?

An insider hasn't bought LPL Financial Holdings stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. It is good to see high insider ownership, but the insider selling leaves us cautious. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. At Simply Wall St, we found 1 warning sign for LPL Financial Holdings that deserve your attention before buying any shares.

Of course LPL Financial Holdings 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.