Have Honest Company Insiders Been Selling Stock?

We wouldn't blame The Honest Company, Inc. (NASDAQ:HNST) shareholders if they were a little worried about the fact that Carla Vernon, the CEO & Director recently netted about US$526k selling shares at an average price of US$5.32. That sale reduced their total holding by 10% which is hardly insignificant, but far from the worst we've seen.

Our free stock report includes 1 warning sign investors should be aware of before investing in Honest Company. Read for free now.

The Last 12 Months Of Insider Transactions At Honest Company

In fact, the recent sale by CEO & Director Carla Vernon was not their only sale of Honest Company shares this year. They previously made an even bigger sale of -US$948k worth of shares at a price of US$4.91 per share. So we know that an insider sold shares at around the present share price of US$4.85. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

Honest Company insiders didn't buy any shares over 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!

View our latest analysis for Honest Company

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

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. Insiders own 8.3% of Honest Company shares, worth about US$45m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Honest Company Tell Us?

Insiders haven't bought Honest Company stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Honest Company has 1 warning sign we think you should be aware of.

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.