A Canadian technology company that has swung wildly amid shifting expectations around economic performance, Lightspeed POS (TSX:LSPD) is a high beta, high volatility option most often chosen as an investment by growth investors with a higher tolerance for risk.
As a long-term, conservative fundamental investor, I've largely avoided Lightspeed stock for this reason. In this article, I’m going to cover another reason why investors may be better suited by avoiding this stock.
Insiders at Lightspeed, as of the beginning of this year during the rapid rise of the company stock price, were selling stock. This signal, combined with what I viewed as an unreasonable valuation bump in Lightspeed’s stock price, has indicated to me how dangerous the stock is as a long-term buy and hold at these levels.
Was more economic uncertainty potentially on the horizon, I'd encourage investors to be wary of owning the stock until we can see a clear path out of this recession.
As always, please remember to consult with a certified financial advisor into your own homework before making investing decisions. Insider buying and selling activity is not necessarily indicative of the future performance of a given company’s stock price, and insiders regularly buy or sell positions in companies they own or manage for reasons other than expectations of future stock price performance.
Analyzing insider transactions in a given stock is one tool of many to glean pertinent information to assist in investment decision making.
Invest wisely, my friends.
