Have Honest Company Insiders Been Selling Stock?

Anyone interested in The Honest Company, Inc. (NASDAQ:HNST) should probably be aware that the Chief People Officer, Dorria Ball, recently divested US$104k worth of shares in the company, at an average price of US$4.91 each. On the bright side, that sale was only 7.1% of their holding, so we doubt it's very meaningful, on its own.

Check out our latest analysis for Honest Company

The Last 12 Months Of Insider Transactions At Honest Company

The Founder & Director, Jessica Warren, made the biggest insider sale in the last 12 months. That single transaction was for US$2.4m worth of shares at a price of US$3.07 each. That means that even when the share price was below the current price of US$4.84, an insider wanted to cash in some shares. 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. 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. This single sale was just 13% of Jessica Warren's stake.

Insiders in Honest Company didn't buy any shares in the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 8.5% of Honest Company shares, worth about US$44m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Honest Company Insiders?

An insider sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. While insiders do own shares, they don't own a heap, and they have been selling. We're in no rush to buy! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Honest Company. At Simply Wall St, we found 1 warning sign for Honest Company that deserve your attention before buying any shares.

But note: Honest Company 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.