Possible Bearish Signals With Ralph Lauren Insiders Disposing Stock

Over the past year, many Ralph Lauren Corporation (NYSE:RL) insiders sold a significant stake in the company which may have piqued investors' interest. 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, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Ralph Lauren

The Last 12 Months Of Insider Transactions At Ralph Lauren

The Chief Operating Officer, Jane Nielsen, made the biggest insider sale in the last 12 months. That single transaction was for US$12m worth of shares at a price of US$173 each. That means that an insider was selling shares at slightly below the current price (US$287). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was 88% of Jane Nielsen's holding.

Insiders in Ralph Lauren didn't buy any shares in the last year. 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!

I will like Ralph Lauren better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insiders At Ralph Lauren Have Sold Stock Recently

The last three months saw significant insider selling at Ralph Lauren. In total, Chief Product Officer Halide Alagoz dumped US$1.9m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It's great to see that Ralph Lauren insiders own 32% of the company, worth about US$5.7b. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Ralph Lauren Tell Us?

An insider hasn't bought Ralph Lauren stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. But it is good to see that Ralph Lauren is growing earnings. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Ralph Lauren.

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 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.