Don't Ignore The Fact That This Insider Just Sold Some Shares In The Estée Lauder Companies Inc. (NYSE:EL)

By
Simply Wall St
Published
May 14, 2022
NYSE:EL
Source: Shutterstock

We wouldn't blame The Estée Lauder Companies Inc. (NYSE:EL) shareholders if they were a little worried about the fact that Jane Hudis, a company insider, recently netted about US$1.9m selling shares at an average price of US$231. That sale reduced their total holding by 21% which is hardly insignificant, but far from the worst we've seen.

View our latest analysis for Estée Lauder Companies

Estée Lauder Companies Insider Transactions Over The Last Year

The insider, Aerin Lauder, made the biggest insider sale in the last 12 months. That single transaction was for US$66m worth of shares at a price of US$300 each. 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$240). So it may not shed much light on insider confidence at current levels.

Insiders in Estée Lauder Companies 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!

insider-trading-volume
NYSE:EL Insider Trading Volume May 14th 2022

I will like Estée Lauder Companies better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership of Estée Lauder Companies

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Estée Lauder Companies insiders own 8.1% of the company, currently worth about US$6.9b based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Estée Lauder Companies Insider Transactions Indicate?

Insiders sold Estée Lauder Companies shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. On the plus side, Estée Lauder Companies makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. 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 that end, you should learn about the 3 warning signs we've spotted with Estée Lauder Companies (including 1 which doesn't sit too well with us).

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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