Insiders Could Have Profited By Holding onto Olaplex Holdings Shares Despite 12% Drop

Despite the fact that Olaplex Holdings, Inc.'s (NASDAQ:OLPX) value has dropped 12% in the last week insiders who sold US$1.0m worth of stock in the past 12 months have had less success. Insiders might have been better off holding onto their shares, given that the average selling price of US$1.94 is still below the current share price.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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Olaplex Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the CEO & Director, Amanda Baldwin, sold US$803k worth of shares at a price of US$2.10 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (US$1.17). So it is hard to draw any strong conclusion from it.

In the last twelve months insiders purchased 313.32k shares for US$599k. But they sold 531.34k shares for US$1.0m. Over the last year we saw more insider selling of Olaplex Holdings shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

Check out our latest analysis for Olaplex Holdings

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Insiders At Olaplex Holdings Have Sold Stock Recently

We've seen more insider selling than insider buying at Olaplex Holdings recently. In that time, insiders dumped US$89k worth of shares. On the flip side, insider Kenneth Egan spent US$13k on purchasing shares. We don't view these transactions as a positive sign.

Does Olaplex Holdings Boast High 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. Our data indicates that Olaplex Holdings insiders own about US$8.4m worth of shares (which is 1.0% of the company). Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The Olaplex Holdings Insider Transactions Indicate?

The stark truth for Olaplex Holdings is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. When you consider that most companies have higher levels of insider ownership, we're a little wary. So we're not rushing to buy, to say the least. 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. To help with this, we've discovered 2 warning signs (1 doesn't sit too well with us!) that you ought to be aware of before buying any shares in Olaplex Holdings.

But note: Olaplex Holdings 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.