Yahoo Finance Estée Lauder Companies Insiders Sell US$4.6m Of Stock, Possibly Signalling Caution
In the last year, many The Estée Lauder Companies Inc. (NYSE:EL) insiders sold a substantial stake in the company which may have sparked shareholders' attention. 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.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for Estée Lauder Companies
Estée Lauder Companies Insider Transactions Over The Last Year
The Executive Group President, Jane Hudis, made the biggest insider sale in the last 12 months. That single transaction was for US$2.0m worth of shares at a price of US$202 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$143). So it may not tell us anything about how insiders feel about the current share price.
In total, Estée Lauder Companies insiders sold more than they bought over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Estée Lauder Companies better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Estée Lauder Companies Insiders Are Selling The Stock
Over the last three months, we've seen notably more insider selling, than insider buying, at Estée Lauder Companies. We note Executive VP & General Counsel Deirdre Stanley cashed in US$638k worth of shares. On the flip side, Independent Director Jennifer Hyman spent US$198k on purchasing shares (as mentioned above) . Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the shares are not cheap.
Insider Ownership Of Estée Lauder Companies
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It's great to see that Estée Lauder Companies insiders own 11% of the company, worth about US$5.9b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Estée Lauder Companies Insider Transactions Indicate?
The stark truth for Estée Lauder Companies is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. It is good to see high insider ownership, but the insider selling leaves us cautious. While we like knowing 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. For example, Estée Lauder Companies has 4 warning signs (and 2 which can't be ignored) we think you should know about.
But note: Estée Lauder Companies may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.
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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.
