This Insider Has Just Sold Shares In Ralph Lauren Corporation (NYSE:RL)

We wouldn't blame Ralph Lauren Corporation (NYSE:RL) shareholders if they were a little worried about the fact that Andrew Smith, the Executive VP & Chief Commercial Officer recently netted about US$1.2m selling shares at an average price of US$120. That's a big disposal, and it decreased their holding size by 11%, which is notable but not too bad.

View our latest analysis for Ralph Lauren

The Last 12 Months Of Insider Transactions At Ralph Lauren

In fact, the recent sale by Andrew Smith was the biggest sale of Ralph Lauren shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at below the current price (US$120). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 11% of Andrew Smith's holding.

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

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Ralph Lauren insiders own about US$2.3b worth of shares (which is 27% of the company). 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 sold Ralph Lauren shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 3 warning signs for Ralph Lauren you should be aware of, and 1 of them is significant.

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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