Yahoo Finance Selling Estée Lauder Companies Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders \
The Estée Lauder Companies Inc.'s (NYSE:EL) value has fallen 18% in the last week, but insiders who sold US$11m worth of stock over the last year have had less success. The average selling price of US$258 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
Check out our latest analysis for Estée Lauder Companies
The Last 12 Months Of Insider Transactions At Estée Lauder Companies
The President, Fabrizio Freda, made the biggest insider sale in the last 12 months. That single transaction was for US$5.3m worth of shares at a price of US$268 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$201. So it may not shed much light on insider confidence at current levels.
In the last year Estée Lauder Companies insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership Of Estée Lauder Companies
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Estée Lauder Companies insiders own about US$8.9b worth of shares (which is 12% of the company). 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 Does This Data Suggest About Estée Lauder Companies Insiders?
There haven't been any insider transactions in the last three months -- that doesn't mean much. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Estée Lauder Companies insiders selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Estée Lauder Companies. In terms of investment risks, we've identified 1 warning sign with Estée Lauder Companies and understanding this should be part of your investment process.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, but not derivative transactions.
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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.
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