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, if numerous insiders are selling, shareholders should investigate more.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for Estée Lauder Companies
The Last 12 Months Of Insider Transactions At Estée Lauder Companies
In the last twelve months, the biggest single sale by an insider was when the Executive Group President, Jane Hudis, sold US$2.0m worth of shares at a price of US$202 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$145. So it may not tell us anything about how insiders feel about the current share price.
Over the last year we saw more insider selling of Estée Lauder Companies shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Estée Lauder Companies Insiders Are Selling The Stock
There was substantially more insider selling, than buying, of Estée Lauder Companies shares over the last three months. We note Executive VP & General Counsel Deirdre Stanley cashed in US$638k worth of shares. Meanwhile Independent Director Jennifer Hyman bought US$198k worth , as we said above . Because the selling vastly outweighs the buying, we'd say this is a somewhat bearish sign.
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. 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$5.7b. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Estée Lauder Companies Insiders?
The insider sales have outweighed the insider buying, at Estée Lauder Companies, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 4 warning signs for Estée Lauder Companies (2 are concerning!) and we strongly recommend you look at these before investing.
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.