When it comes to investing in ASX shares, investors typically like to keep abreast of what the insiders at the company are doing in terms of buying and selling their own company's stock. That includes Lake Resources N.L. (ASX: LKE) shares.
Shareholders typically like to see the insiders, directors and CEO own as many shares of their own company as possible. This shows to investors that the financial interests of these insiders are tied to those of the shareholders and that management has real 'skin in the game' when it comes to running the company well.
Conversely, investors typically hate to see those insiders sell out of the shares of the companies they are managing.
So today, let's dig through ASX lithium stock Lake Resources' ASX notices to find out whether the company's insiders have been putting their money where their mouths are over the past two years.
Have Lake Resources' insiders been buying or selling their own company's shares?
The most recent director transaction for Lake Resources came earlier this year on 24 March. This revealed that non-executive chair Stuart Crow offloaded close to 554,000 Lake shares for a sum of almost $300,000. That left him with just under 2.1 million shares of Lake. A further 7.37 million shares were also sold by his partner Ainslie Williams.
At the time, Lake Resources clarified that Crow had made these sales "under advice to meet personal financial obligations". The company went on to say, "Mr Crow currently has no plans to sell any additional shares in the foreseeable future".
Before this sale, we had the May 2022 notice that Dr Nicholas Lindsay sold around $400,000 worth of listed options. Lake Resources directors seem to be periodically awarded performance options for their service, which are convertible into shares at certain points.
The same Dr Lindsay sold 350,000 ordinary shares on 13 April 2022 for just over $664,000.
That same month, we had another major share sale. This time, it was director Steve Promnitz. Promnitz disposed of 1 million shares for a total windfall of $2.29 million.
More sells than buys?
Then, back in December 2021, we got another sale notice from chair Stuart Crow. Between 22 and 24 December of that year, Crow sold over 3 million shares worth around $3 million.
And again, this sale was justified by the company in the following terms :
The sale, which represents a small percentage of Mr Crow's total holdings in the company, was made as part of a financial planning initiative that in no way diminishes Mr Crow's commitment to the company…
At this stage, Mr Crow, as he has done in the past, intends to facilitate the exercise of options in which he has a relevant interest and has no plans to sell any additional shares in the foreseeable future.
Then we go back to Dr Lindsay. Lindsay offloaded another 600,000 Lake Resources shares back on 8 and 9 November 2021. He bagged roughly $637,000 for his efforts here.
Now, on to our final two transactions to analyse.
Promnitz cashed in 1.2 million shares of Lake Resources on 29 October 2021 while simultaneously acquiring a similar number from exercising options worth just under $400,000.
Finally, our last transaction is a buy. We're again back to Stu Crow, who picked up more than 10 million shares on 20 October 2021. This was done through a mixture of off-market transactions and options exercises.
Foolish takeaway
So it seems that most of the director transactions that took place at Lake Resources over the past two years were sales. The company has explained this, of course. Remember, directors have their own financial interests to consider, which (if prudent) would involve not concentrating all of their wealth in a single company.
But it's up to Lake Resources' shareholders to determine whether they find the Lake management's buying and selling behaviour over the past two years exceptional.
